Approximate date of commencement of proposed sale to the
public: As soon as practicable after the effective date of
this Registration Statement.

If any of the securities being registered on this form are to be
offered on a delayed or continuous basis pursuant to
Rule 415 under the Securities Act of 1933, check the
following
box. o

If this form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act,
check the following box and list the Securities Act registration
statement number of the earlier effective registration statement
for the same
offering. o

If this form is a post-effective amendment filed pursuant to
Rule 462(c) under the Securities Act, check the following
box and list the Securities Act registration statement number of
the earlier effective registration statement for the same
offering. o

If this form is a post-effective amendment filed pursuant to
Rule 462(d) under the Securities Act, check the following
box and list the Securities Act registration statement number of
the earlier effective registration statement for the same
offering. o

Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated
filer, or a smaller reporting company. See the definitions of
large accelerated filer, accelerated
filer and smaller reporting company in
Rule 12b2 of the Exchange Act.

Large
accelerated
filer o

Accelerated
filer o

Non-accelerated
filer þ

Smaller
reporting
company o

(Do not check if a smaller reporting company)

Title of Each Class

Proposed Maximum Aggregate

Amount of

of Securities to be Registered

Offering Price(1)(2)

Registration Fee

Class A common stock, par value $0.001 per share

$750,000,000

$29,475(3)

(1)

Includes shares of Class A common stock which the
underwriters have the right to purchase to cover over-allotments.

(2)

Estimated solely for the purpose of computing the amount of the
registration fee pursuant to Rule 457(o) under the
Securities Act of 1933.

(3)

Previously paid.

The Registrant hereby amends
this Registration Statement on such date or dates as may be
necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in
accordance with Section 8(a) of the Securities Act of 1933
or until the Registration Statement shall become effective on
such date as the Commission, acting pursuant to said
Section 8(a), may determine.

The
information in this prospectus is not complete and may be
changed. We may not sell these securities until the registration
statement filed with the Securities and Exchange Commission is
effective. This prospectus is not an offer to sell
these securities and is not soliciting an offer to buy these
securities in any jurisdiction where the offer or sale is not
permitted.

Subject to Completion Dated
August 21, 2009

PRELIMINARY
PROSPECTUS

Shares

Verisk Analytics,
Inc.

Class A Common
Stock

This is our initial public offering of common stock. Our
stockholders are selling all of the shares of our Class A
common stock, par value $0.001 per share, offered by this
prospectus. We are not selling any shares in this offering.

We expect the public offering price to be between
$ and
$ per share. Currently, no public
market exists for the shares. After pricing of the offering, we
expect that the shares will be listed on the New York Stock
Exchange under the symbol VA.

Investing in our common stock involves risks that are
described in the Risk Factors section beginning on
page 11 of this prospectus.

Per Share

Total

Public offering price

$

$

Underwriting discount

$

$

Proceeds, before expenses, to the selling stockholders

$

$

The underwriters may also purchase up to an
additional shares
of Class A common stock from the selling stockholders at
the initial public offering price, less the underwriting
discount, within 30 days from the date of this prospectus
to cover over-allotments, if any.

Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these
securities or determined if this prospectus is truthful or
complete. Any representation to the contrary is a criminal
offense.

The shares will be ready for delivery on or
about ,
2009, which will be the third business day following the pricing
date.

You should rely only on the information contained in this
prospectus. We and the selling stockholders have not authorized
anyone to provide you with information different from that
contained in this prospectus. We and the selling stockholders
are offering to sell, and seeking offers to buy, shares of
Class A common stock only in jurisdictions where offers and
sales are permitted. The information contained in this
prospectus is accurate only as of the date of this prospectus,
regardless of the time of delivery of this prospectus or of any
sale of the common stock.

Prior to the completion of this offering, we will have effected
an internal reorganization whereby our predecessor, Insurance
Services Office, Inc., or ISO, will become a wholly-owned
subsidiary of the Company and all outstanding shares of ISO
common stock will be replaced with common stock of the Company.
We will immediately thereafter effect an approximately
fifty-for-one split of our common stock.

Except as the context otherwise requires, all share and per
share information in this prospectus gives effect to the
approximately fifty-for-one stock split that will occur
immediately after the reorganization.

Unless otherwise stated herein or the context otherwise
requires, the terms Verisk, the Company,
we, us, and our refer to
Verisk Analytics, Inc. and its consolidated subsidiaries after
giving effect to the reorganization described above, and prior
to such reorganization these terms refer to ISO and its
consolidated subsidiaries through which we are currently
conducting our operations.

Until ,
2009, 25 days after the commencement of this offering, all
dealers that buy, sell, or trade shares of our common stock,
whether or not participating in this offering, may be required
to deliver a prospectus. This delivery requirement is in
addition to the dealers obligations to deliver a
prospectus when acting as underwriters and with respect to their
unsold allotments or subscriptions.

We expect to deliver the shares against payment therefor on or
about the date specified in the last paragraph of the cover page
of this prospectus, which will be the third business day
following the date of the pricing of the shares.

This summary highlights information contained elsewhere in
this prospectus. This summary may not contain all of the
information that you should consider before deciding to invest
in our Class A common stock. You should read this entire
prospectus carefully, including the Risk Factors
section and the consolidated financial statements and the notes
to those statements.

Company
Overview

We enable risk-bearing businesses to better understand and
manage their risks. We provide value to our customers by
supplying proprietary data that, combined with our analytic
methods, creates embedded decision support solutions. We are the
largest aggregator and provider of detailed actuarial and
underwriting data pertaining to U.S. property and casualty,
or P&C, insurance risks. We offer solutions for detecting
fraud in the U.S. P&C insurance, healthcare and
mortgage industries, and sophisticated methods to predict and
quantify loss in diverse contexts ranging from natural
catastrophes to health insurance.

Our customers use our solutions, in the form of our data,
statistical models or tailored analytics, to make more logical
decisions. We develop solutions which our customers use to
analyze the four key processes in managing risk, in what we
define as the Verisk Risk Analysis Framework: Prediction of
Loss, Selection and Pricing of Risk, Detection and Prevention of
Fraud, and Quantification of Loss.

We organize our business in two segments: Risk Assessment and
Decision Analytics.

Risk Assessment: We are the leading
provider of statistical, actuarial and underwriting data for the
U.S. P&C insurance industry. Our proprietary and
unique databases describe premiums and losses in insurance
transactions, casualty and property risk attributes for
commercial buildings and their occupants and fire suppression
capabilities of municipalities in addition to other properties
and attributes. Our largest P&C insurance database includes
over 14 billion records, and, in each of the past three
years, we updated the database with over 2 billion
validated new records. We use our data, for example, to create
policy language and proprietary risk classifications that are
industry standard and to generate prospective loss cost
estimates used to price insurance policies.

Decision Analytics: We provide
solutions in each of the four processes of the Verisk Risk
Analysis Framework by combining algorithms and analytic methods,
which incorporate our proprietary data. Our unique data sets
include over 600 million P&C insurance claims,
historic natural catastrophe data covering more than 50
countries, data from more than 13 million applications for
mortgage loans and over 312 million U.S. criminal
records. Customers integrate our solutions into their models,
formulas or underwriting criteria to predict potential loss
events, ranging from hurricanes and earthquakes to unanticipated
healthcare claims. We are a leading developer of catastrophe and
extreme event models and offer solutions covering natural and
man-made risks, including acts of terrorism. We also develop
solutions that allow customers to quantify costs after loss
events occur. Our fraud solutions include data on claim
histories, analysis of mortgage applications to identify
misinformation, analysis of claims to find emerging patterns of
fraud and identification of suspicious claims in the insurance,
healthcare and mortgage sectors.

We believe our solutions for analyzing risk positively impact
our customers revenues and help them better manage their
costs. The embedded nature of our solutions serves to strengthen
and extend our relationships. In 2008, our U.S. customers
included all of the top 100 P&C insurance providers, four
of the 10 largest Blue Cross Blue Shield plans, four of the six
leading mortgage insurers, 14 of the top 20 mortgage lenders,
and the 10 largest global reinsurers. Approximately 97% of our
top 100 customers in 2008, as ranked by revenue, have been our
customers for each of the last five years. Further, from 2004 to
2008, revenues generated from these top 100 customers grew at a
compound annual growth rate, or CAGR, of 12%.

We offer our solutions and services primarily through annual
subscriptions or long-term agreements, which are typically
pre-paid and represented approximately 76% of our revenues in
2008. For the year ended December 31, 2008, and the six
months ended June 30, 2009, we had revenues of
$894 million and $504 million, respectively, and net
income of $158 million and $91 million, respectively.
For the five year

period ended December 31, 2008, our revenues and net income
have grown at a CAGR of 13.0% and 12.4%, respectively.

Our
Market Opportunity

We believe there is a long-term trend for companies to set
strategy and direct operations using data and analytics to guide
their decisions, which has resulted in a large and rapidly
growing market for professional and business information.
According to a 2008 report from Veronis Suhler Stevenson, an
industry consultant, spending on professional and business
information services in the U.S. reached $46 billion
in 2007 and is projected to grow at a CAGR of 9% through 2012.
Another research firm, International Data Corporation, or IDC,
in a report dated March 2008, estimates that the business
analytics services market, which totaled $32 billion in
2007, will grow at a CAGR of 9% through 2012.

We believe that the consistent decline in the cost of computing
power contributes to the trend towards greater use of data and
analytics. As a result, larger data sets are assembled faster
and at a lower cost per record while the complexity and accuracy
of analytical applications and solutions have expanded. This
trend has led to an increase in the use of analytic output,
which can be generated and applied more quickly, resulting in
more informed decision making. As computing power increases,
cost decreases and accuracy improves, we believe customers will
continue to apply and integrate data and analytic solutions more
broadly.

Companies that engage in risk transactions, including P&C
insurers, healthcare payors and mortgage lenders and insurers,
are particularly motivated to use enhanced analytics because of
several factors affecting risk markets, including:



the total value of exposures in risk transactions is increasing;



the number of participants in risk transactions is often large
and the asymmetry of information among participants is often
substantial; and



the failure to understand risk can lead to large and rapid
declines in financial performance.

Our
Competitive Strengths

We believe our competitive strengths include the following:



Our Solutions are Embedded In Our Customers Critical
Decision Processes. Our customers use our
solutions to make better risk decisions and to price risk
appropriately. In the U.S. P&C insurance industry, our
solutions for prospective loss costs, policy language,
rating/underwriting rules and regulatory filing services are the
industry standard. In the U.S. healthcare and mortgage
industries, our predictive models, loss estimation tools and
fraud identification applications are the primary solutions that
allow customers to understand their risk exposures and
proactively manage them. Over the last three years, we have
retained 98% of our customers across all of our businesses,
which we believe reflects our customers recognition of the
value they derive from our solutions.



Extensive and Differentiated Data Assets and Analytic
Methods. We maintain what we believe are some
of the largest, most accurate, and most complete databases in
the markets we serve. Much of the information we provide is not
available from any other source and would be difficult and
costly for another party to replicate. As a result, our
accumulated experience and years of significant investment have
given us a competitive advantage in serving our customers.



Culture of Continuous Improvement. Our
intellectual capital and focus on continuous improvement have
allowed us to develop proprietary algorithms and solutions that
assist our customers in making informed risk decisions. Our team
includes approximately 578 individuals with advanced degrees,
certifications and professional designations in such fields as
actuarial science, data management, mathematics, statistics,
economics, soil mechanics, meteorology and various engineering
disciplines. Our compensation and benefit plans are
pay-for-performance-

oriented, including incentive compensation plans and
substantial equity participation by employees. As of
June 30, 2009, our employees owned approximately 25% of the
company.



Attractive Operating Model. We believe
we have an attractive operating model due to the recurring
nature of our revenues, the scalability of our solutions and the
low capital intensity of our business.

Our
Growth Strategy

Over the past five years, we have grown our revenues at a CAGR
of 13.0% through the successful execution of our business plan.
These results reflect strong organic revenue growth, new product
development and selected acquisitions. We have made, and
continue to make, investments in people, data sets, analytic
solutions, technology, and complementary businesses. The key
components of our strategy include:



Increase Sales to Insurance
Customers. We expect to expand the
application of our solutions in insurance customers
internal risk and underwriting processes. Building on our deep
knowledge of, and embedded position in, the insurance industry,
we expect to sell more solutions to existing customers tailored
to individual insurance segments. By increasing the breadth and
relevance of our offerings, we believe we can strengthen our
relationships with customers and increase our value to their
decision making in critical ways.



Develop New, Proprietary Data Sets and Predictive
Analytics. We work with our customers to
understand their evolving needs. We plan to create new solutions
by enriching our mix of proprietary data sets, analytic
solutions and effective decision support across the markets we
serve. We constantly seek to add new data sets that can further
leverage our analytic methods, technology platforms and
intellectual capital.



Leverage Our Intellectual Capital to Expand into Adjacent
Markets and New Customer Sectors. Our
organization is built on nearly four decades of intellectual
property in risk management. We believe we can continue to
profitably expand the use of our intellectual capital and apply
our analytic methods in new markets, where significant
opportunities for long-term growth exist. We also continue to
pursue growth through targeted international expansion. We have
already demonstrated the effectiveness of this strategy with our
expansion into healthcare and non-insurance financial services.



Pursue Strategic Acquisitions that Complement Our
Leadership Positions. We will continue to
expand our data and analytics capabilities across industries.
While we expect this will occur primarily through organic
growth, we have and will continue to acquire assets and
businesses that strengthen our value proposition to customers.
We have developed an internal capability to source, evaluate and
integrate acquisitions that have created value for shareholders.
As of June 30, 2009, we have acquired 15 businesses in
the past five years, which in the aggregate have increased their
revenue with a weighted average CAGR of 31% over the same period.

Risk
Factors

Investing in our common stock involves substantial risk. Please
read Risk Factors beginning on page 11 for a
discussion of certain factors you should consider in evaluating
an investment in our common stock.

We were formed in 1971 as an advisory and rating organization
for the P&C insurance industry to provide statistical and
actuarial services, to develop insurance programs and to assist
insurance companies in meeting state regulatory requirements.
Over the past decade, we have transformed our business by
deepening and broadening our data assets, entering new markets,
placing a greater emphasis on analytics and pursuing strategic
acquisitions to enhance these efforts. Members of our senior
management operating team have been with us for an average of
almost twenty years. This team has led our transformation to a
successful for-profit entity and our expansion from P&C
insurance into a variety of new markets.

Our principal executive offices are located at 545 Washington
Boulevard, Jersey City, New Jersey,
07310-1686
and our telephone number is
(201) 469-2000.

The Class B (Series 1) common stock is not
transferable until 18 months after the date of this
prospectus and the Class B (Series 2) common
stock is not transferable until 24 months after the date of
this prospectus.

These transfer restrictions are subject to limited exceptions,
including transfers to another holder of Class B common
stock. See Description of Capital Stock  Common
Stock  Transfer Restrictions.

Conversion of Class B common stock

After termination of the restrictions on transfer described
above for each series of Class B common stock, such series
of Class B common stock will be automatically converted
into Class A common stock. No later than 24 months
after the date of this prospectus, there will be no outstanding
shares of Class B common stock.

In the event that Class B common stock is transferred and
converts into Class A common stock, it will have the effect
of diluting the voting power of our existing holders of
Class A common stock. See Description of Capital
Stock  Common Stock  Conversion.

Use of proceeds

The Company will not receive any proceeds from the sale of
common stock in the offering.

Dividend policy

Following this offering and subject to legally available funds,
we currently intend to pay a quarterly dividend, in cash, at an
annual rate initially equal to $
per share of Class A common stock (representing a quarterly
rate initially equal to $ per
share) commencing with the quarter
ended
, 2009. Our Class B common stock will share ratably on an
as-converted basis in such dividends. The declaration and
payment of any dividends will be at the sole discretion of our
board of directors after taking into account various factors,
including our financial condition, operating results, capital
requirements, covenants in our debt instruments and other
factors that our board of directors deems relevant.

Unless the context requires otherwise, the number of shares of
our Class A common stock to be outstanding after this
offering is based on the number of shares outstanding as of
June 30, 2009, giving effect to the stock split of
approximately fifty-for-one that will have occurred prior to the
completion of this offering. The number of shares of our
Class A common stock to be outstanding after this offering
does not take into account, unless the context otherwise
requires:



shares
of Class A common stock issuable upon the exercise of
outstanding stock options at a weighted average exercise price
of $ per share; and



an aggregate
of shares
of Class A common stock that will be reserved for future
issuances under our 2009 Equity Incentive Plan as of the closing
of this offering.

The following summary historical financial data should be read
in conjunction with, and are qualified by reference to,
Managements Discussion and Analysis of Financial
Condition and Results of Operations and the consolidated
financial statements and notes thereto included elsewhere in
this prospectus. The consolidated statement of operations data
for the years ended December 31, 2006, 2007 and 2008 and
the consolidated balance sheet data as of December 31, 2007
and 2008 are derived from the audited consolidated financial
statements included elsewhere in this prospectus. The
consolidated balance sheet data as of December 31, 2006 is
derived from unaudited consolidated financial statements that
are not included in this prospectus. The condensed consolidated
statement of operations data for the six-month periods ended
June 30, 2008 and 2009 and the condensed consolidated
balance sheet data as of June 30, 2009 are derived from
unaudited condensed financial statements that are included in
this prospectus. The condensed consolidated balance sheet data
as of June 30, 2008 is derived from unaudited condensed
financial statements that are not included in this prospectus.
The unaudited condensed consolidated financial statements, in
our opinion, have been prepared on the same basis as the audited
consolidated financial statements and reflect all adjustments,
consisting only of normal recurring adjustments, necessary for a
fair presentation of our results of operations and financial
position. Results for the six-month period ended June 30,
2009 are not necessarily indicative of results that may be
expected for the fiscal year ended December 31, 2009 or any
other future period.

From January 1, 2006 to June 30, 2009 we have acquired
10 businesses, which may affect the comparability of our
financial statements.

As of December 31, 2007, we discontinued operations of our
claim consulting business located in New Hope, Pennsylvania and
the United Kingdom. There was no impact of discontinued
operations on the results of operations for the periods
subsequent to December 31, 2007.

In conjunction with the initial public offering, the stock of
Insurance Services Office, Inc. will convert to stock of Verisk
Analytics, Inc., which plans to effect a stock split of its
common stock. The numbers in the above table do not reflect this
stock split. Giving effect to the approximately fifty-for-one
stock split that will have occurred prior to the completion of
this offering, pro forma basic and diluted income/(loss) per
share from continuing operations and discontinued operations
would have been as follows:

Year Ended December 31,

Six Months Ended June 30,

2006

2007

2008

2008

2009

Basic

Income from continuing operations

$

0.68

$

0.77

$

0.87

$

0.43

$

0.52

Loss from discontinued operations

(0.01

)

(0.02

)







Net Income per share

$

0.67

$

0.75

$

0.87

$

0.43

$

0.52

Weighted average shares

206,548,100

200,846,400

182,885,700

186,243,800

173,409,800

Diluted

Income from continuing operations

$

0.65

$

0.74

$

0.83

$

0.42

$

0.50

Loss from discontinued operations

(0.01

)

(0.02

)







Net Income per share

$

0.64

$

0.72

$

0.83

$

0.42

$

0.50

Weighted average shares

215,143,350

209,257,550

190,231,700

193,895,300

180,204,300

(3)

EBITDA is the financial measure which management uses to
evaluate the performance of our segments. EBITDA is
defined as income from continuing operations before investment
income and interest expense, income taxes, depreciation and
amortization. See note 19 to our audited consolidated
financial statements and note 15 to our unaudited condensed
consolidated financial statements included elsewhere in this
prospectus.

Although EBITDA is frequently used by securities analysts,
lenders and others in their evaluation of companies, EBITDA has
limitations as an analytical tool, and should not be considered
in isolation, or as a substitute for an analysis of our results
of operations or cash flow from operating activities reported
under U.S. GAAP. Management uses EBITDA in conjunction with
traditional GAAP operating performance measures as part of its
overall assessment of company performance. Some of these
limitations are:

 Although depreciation and
amortization are non-cash charges, the assets being depreciated
and amortized often will have to be replaced in the future and
EBITDA does not reflect any cash requirements for such
replacements; and

 Other companies in our
industry may calculate EBITDA differently than we do, limiting
its usefulness as a comparative measure.

The following is a reconciliation of income from continuing
operations to EBITDA:

Six Months

Year Ended December 31,

Ended June 30,

2006

2007

2008

2008

2009

(In thousands)

Income from continuing operations

$

140,785

$

154,963

$

158,228

$

80,949

$

90,854

Depreciation and amortization of fixed and intangible assets

54,861

65,661

64,872

31,361

35,887

Investment income and realized (gains)/losses on securities, net

(6,101

)

(9,308

)

327

(317

)

273

Interest expense

16,668

22,928

31,316

14,173

16,677

Provision for income taxes

91,992

103,184

120,671

61,818

67,250

EBITDA

$

298,205

$

337,428

$

375,414

$

187,984

$

210,941

(4) Includes capital lease obligations.

(5)

Prior to this offering, we are required to record our
Class A common stock and vested options at redemption value
at each balance sheet date as the redemption of these securities
is not solely within our control, due to our contractual
obligations to redeem these shares. We classify this redemption
value as redeemable common stock. Subsequent to this offering,
we will no longer be obligated to redeem these shares and
therefore we will not be required to record any redeemable
common stock.

You should carefully consider the following risks and all of
the other information set forth in this prospectus before
deciding to invest in shares of our Class A common stock.
If any of the following risks actually occurs, our business,
financial condition or results of operations would likely
suffer. In such case, the trading price of our Class A
common stock could decline due to any of these risks, and you
may lose all or part of your investment.

Risks
Related to Our Business

We
could lose our access to data from external sources which could
prevent us from providing our solutions.

We depend upon data from external sources, including data
received from customers and various government and public record
services, for information used in our databases. In general, we
do not own the information in these databases, and the
participating organizations could discontinue contributing
information to the databases. Our data sources could withdraw or
increase the price for their data for a variety of reasons, and
we could also become subject to legislative or judicial
restrictions on the use of such data, in particular if such data
is not collected by the third parties in a way which allows us
to legally use
and/or
process the data. In addition, many of our customers are
significant stockholders of our company. Specifically, all of
our Class B common stock is owned by insurers who are also
our customers and provide us with a significant percentage of
our data. If our customers percentage of ownership of our
common stock decreases in the future, including as a result of
this offering, there can be no assurance that our customers will
continue to provide data to the same extent or on the same
terms. If a substantial number of data sources, or certain key
sources, were to withdraw or be unable to provide their data, or
if we were to lose access to data due to government regulation
or if the collection of data became uneconomical, our ability to
provide solutions to our customers could be impacted, which
could materially adversely affect our business, reputation,
financial condition, operating results and cash flows.

Agreements with our data suppliers are short-term agreements.
Some suppliers are also competitors, which may make us
vulnerable to unpredictable price increases and may cause some
suppliers not to renew certain agreements. Our competitors could
also enter into exclusive contracts with our data sources. If
our competitors enter into such exclusive contracts, we may be
precluded from receiving certain data from these suppliers or
restricted in our use of such data, which would give our
competitors an advantage. Such a termination or exclusive
contracts could have a material adverse effect on our business,
financial position, and operating results if we were unable to
arrange for substitute sources.

We
derive a substantial portion of our revenues from the U.S.
P&C insurance industry. If the downturn in the U.S.
insurance industry continues or that industry does not continue
to accept our solutions, our revenues will
decline.

Revenues derived from solutions we provide to the
U.S. P&C insurance industry account for a substantial
portion of our total revenues. During the year ended
December 31, 2008 and the six months ended June 30,
2009, approximately 65% and 60%, respectively, of our revenue
was derived from solutions provided to the U.S. P&C
insurance industry. Also, sales of certain of our solutions are
tied to premiums in the U.S. P&C insurance market,
which may rise or fall in any given year due to loss experience
and capital capacity and other factors in the insurance industry
beyond our control. In addition, our revenues will decline if
the insurance industry does not continue to accept these
solutions. Factors that might affect the acceptance of these
solutions by P&C insurers include the following:



changes in the business analytics industry;



changes in technology;



our inability to obtain or use state fee schedule or claims data
in our insurance solutions;

A continued downturn in the insurance industry or lower
acceptance of our solutions by the insurance industry could
result in a decline in revenues from that industry and have a
material adverse effect on our financial condition, results of
operations and cash flows.

There
may be consolidation in our end customer market, which would
reduce the use of our services.

Mergers or consolidations among our customers could reduce the
number of our customers and potential customers. This could
adversely affect our revenues even if these events do not reduce
the aggregate number of customers or the activities of the
consolidated entities. If our customers merge with or are
acquired by other entities that are not our customers, or that
use fewer of our services, they may discontinue or reduce their
use of our services. The adverse effects of consolidation will
be greater in sectors that we are particularly dependent upon,
for example, in the P&C insurance services sector. Any of
these developments could materially and adversely affect our
business, financial condition, operating results and cash flows.

If we
are unable to develop successful new solutions or if we
experience defects, failures and delays associated with the
introduction of new solutions, our business could suffer serious
harm.

Our growth and success depends upon our ability to develop and
sell new solutions. If we are unable to develop new solutions,
or if we are not successful in introducing
and/or
obtaining regulatory approval or acceptance for new solutions,
we may not be able to grow our business, or growth may occur
more slowly than we anticipate. In addition, significant
undetected errors or delays in new solutions may affect market
acceptance of our solutions and could harm our business,
financial condition or results of operations. In the past, we
have experienced delays while developing and introducing new
solutions, primarily due to difficulties developing models,
acquiring data and adapting to particular operating
environments. Errors or defects in our solutions that are
significant, or are perceived to be significant, could result in
rejection of our solutions, damage to our reputation, loss of
revenues, diversion of development resources, an increase in
product liability claims, and increases in service and support
costs and warranty claims.

We
will continue to rely upon proprietary technology rights, and if
we are unable to protect them, our business could be
harmed.

Our success depends, in part, upon our intellectual property
rights. To date, we have relied primarily on a combination of
copyright, patent, trade secret, and trademark laws and
nondisclosure and other contractual restrictions on copying and
distribution to protect our proprietary technology. This
protection of our proprietary technology is limited, and our
proprietary technology could be used by others without our
consent. In addition, patents may not be issued with respect to
our pending or future patent applications, and our patents may
not be upheld as valid or may not prevent the development of
competitive products. Any disclosure, loss, invalidity of, or
failure to protect our intellectual property could negatively
impact our competitive position, and ultimately, our business.
Our protection of our intellectual property rights in the United
States or abroad may not be adequate and others, including our
competitors, may use our proprietary technology without our
consent. Furthermore, litigation may be necessary to enforce our
intellectual property rights, to protect our trade secrets, or
to determine the validity and scope of the proprietary rights of
others. Such litigation could result in substantial costs and
diversion of resources and could harm our business, financial
condition, results of operations and cash flows.

We
could face claims for intellectual property infringement, which
if successful could restrict us from using and providing our
technologies and solutions to our customers.

There has been substantial litigation and other proceedings,
particularly in the United States, regarding patent and other
intellectual property rights in the information technology
industry. There is a risk

that we are infringing, or may in the future infringe, the
intellectual property rights of third parties. We monitor
third-party patents and patent applications that may be relevant
to our technologies and solutions and we carry out freedom to
operate analyses where we deem appropriate. However, such
monitoring and analysis has not been, and is unlikely in the
future to be, comprehensive, and it may not be possible to
detect all potentially relevant patents and patent applications.
Since the patent application process can take several years to
complete, there may be currently pending applications, unknown
to us, that may later result in issued patents that cover our
products and technologies. As a result, we may infringe existing
and future third-party patents of which we are not aware. As we
expand our operations there is a higher risk that such activity
could infringe the intellectual property rights of third parties.

Third-party intellectual property infringement claims and any
resultant litigation against us or our technology partners or
providers, could subject us to liability for damages, restrict
us from using and providing our technologies and solutions or
operating our business generally, or require changes to be made
to our technologies and solutions. Even if we prevail,
litigation is time consuming and expensive to defend and would
result in the diversion of managements time and attention.

If a successful claim of infringement is brought against us and
we fail to develop non-infringing technologies and solutions or
to obtain licenses on a timely and cost effective basis this
could materially and adversely affect our business, reputation,
financial condition, operating results and cash flows.

Regulatory
developments could negatively impact our business.

Because personal, public and non-public information is stored in
some of our databases, we are vulnerable to government
regulation and adverse publicity concerning the use of our data.
We provide many types of data and services that already are
subject to regulation under the Fair Credit Reporting Act,
Gramm-Leach-Bliley Act, Drivers Privacy Protection Act,
Health Insurance Portability and Accountability Act, the
European Unions Data Protection Directive and to a lesser
extent, various other federal, state, and local laws and
regulations. These laws and regulations are designed to protect
the privacy of the public and to prevent the misuse of personal
information in the marketplace. However, many consumer
advocates, privacy advocates, and government regulators believe
that the existing laws and regulations do not adequately protect
privacy. They have become increasingly concerned with the use of
personal information, particularly social security numbers,
department of motor vehicle data and dates of birth. As a
result, they are lobbying for further restrictions on the
dissemination or commercial use of personal information to the
public and private sectors. Similar initiatives are under way in
other countries in which we do business or from which we source
data. The following legal and regulatory developments also could
have a material adverse affect on our business, financial
position, results of operations or cash flows:



amendment, enactment, or interpretation of laws and regulations
which restrict the access and use of personal information and
reduce the supply of data available to customers;



changes in cultural and consumer attitudes to favor further
restrictions on information collection and sharing, which may
lead to regulations that prevent full utilization of our
solutions;



failure of our solutions to comply with current laws and
regulations; and



failure of our solutions to adapt to changes in the regulatory
environment in an efficient, cost-effective manner.

Fraudulent
data access and other security breaches may negatively impact
our business and harm our reputation.

Security breaches in our facilities, computer networks, and
databases may cause harm to our business and reputation and
result in a loss of customers. Our systems may be vulnerable to
physical break-ins, computer viruses, attacks by hackers and
similar disruptive problems. Third-party contractors also may
experience security breaches involving the storage and
transmission of proprietary information. If users gain improper
access to our databases, they may be able to steal, publish,
delete or modify confidential third-party information that is
stored or transmitted on our networks.

In addition, customers misuse of our information services
could cause harm to our business and reputation and result in
loss of customers. Any such misappropriation
and/or
misuse of our information could result in us, among other
things, being in breach of certain data protection and related
legislation.

A security or privacy breach may affect us in the following ways:



deterring customers from using our solutions;



deterring data suppliers from supplying data to us;



harming our reputation;



exposing us to liability;



increasing operating expenses to correct problems caused by the
breach;



affecting our ability to meet customers expectations; or



causing inquiry from governmental authorities.

We may detect incidents in which consumer data has been
fraudulently or improperly acquired. The number of potentially
affected consumers identified by any future incidents is
obviously unknown. Any such incident could materially and
adversely affect our business, reputation, financial condition,
operating results and cash flows.

We
typically face a long selling cycle to secure new contracts that
requires significant resource commitments, which result in a
long lead time before we receive revenues from new
relationships.

We typically face a long selling cycle to secure a new contract
and there is generally a long preparation period in order to
commence providing the services. We typically incur significant
business development expenses during the selling cycle and we
may not succeed in winning a new customers business, in
which case we receive no revenues and may receive no
reimbursement for such expenses. Even if we succeed in
developing a relationship with a potential new customer, we may
not be successful in obtaining contractual commitments after the
selling cycle or in maintaining contractual commitments after
the implementation cycle, which may have a material adverse
effect on our business, results of operations and financial
condition.

We may
lose key business assets, including loss of data center capacity
or the interruption of telecommunications links, the internet,
or power sources, which could significantly impede our ability
to do business.

Our operations depend on our ability, as well as that of
third-party service providers to whom we have outsourced several
critical functions, to protect data centers and related
technology against damage from hardware failure, fire, power
loss, telecommunications failure, impacts of terrorism, breaches
in security (such as the actions of computer hackers), natural
disasters, or other disasters. The on-line services we provide
are dependent on links to telecommunications providers. In
addition, we generate a significant amount of our revenues
through telesales centers and websites that we utilize in the
acquisition of new customers, fulfillment of solutions and
services and responding to customer inquiries. We may not have
sufficient redundant operations to cover a loss or failure in
all of these areas in a timely manner. Certain of our customer
contracts provide that our on-line servers may not be
unavailable for specified periods of time. Any damage to our
data centers, failure of our telecommunications links or
inability to access these telesales centers or websites could
cause interruptions in operations that materially adversely
affect our ability to meet customers requirements,
resulting in decreased revenue, operating income and earnings
per share.

We are
subject to competition in many of the markets in which we
operate and we may not be able to compete
effectively.

Some markets in which we operate or which we believe may provide
growth opportunities for us are highly competitive, and are
expected to remain highly competitive. We compete on the basis
of quality,

customer service, product and service selection and price. Our
competitive position in various market segments depends upon the
relative strength of competitors in the segment and the
resources devoted to competing in that segment. Due to their
size, certain competitors may be able to allocate greater
resources to a particular market segment than we can. As a
result, these competitors may be in a better position to
anticipate and respond to changing customer preferences,
emerging technologies and market trends. In addition, new
competitors and alliances may emerge to take market share away.
We may be unable to maintain our competitive position in our
market segments, especially against larger competitors. We may
also invest further to upgrade our systems in order to compete.
If we fail to successfully compete, our business, financial
position and results of operations may be adversely affected.

Acquisitions
could result in operating difficulties, dilution and other
harmful consequences.

Our long-term business strategy includes growth through
acquisitions. Future acquisitions may not be completed on
acceptable terms and acquired assets, data or businesses may not
be successfully integrated into our operations. Any acquisitions
or investments will be accompanied by the risks commonly
encountered in acquisitions of businesses. Such risks include,
among other things:



failing to implement or remediate controls, procedures and
policies appropriate for a larger public company at acquired
companies that prior to the acquisition lacked such controls,
procedures and policies;



paying more than fair market value for an acquired company or
assets;



failing to integrate the operations and personnel of the
acquired businesses in an efficient, timely manner;

incurring expenses associated with the amortization of
intangible assets;



incurring expenses associated with an impairment of all or a
portion of goodwill and other intangible assets due to changes
in market conditions, weak economies in certain competitive
markets, or the failure of certain acquisitions to realize
expected benefits; and



diluting the share value and voting power of existing
stockholders.

The anticipated benefits of many of our acquisitions may not
materialize. Future acquisitions or dispositions could result in
the incurrence of debt, contingent liabilities or amortization
expenses, or write-offs of goodwill and other intangible assets,
any of which could harm our financial condition.

We typically fund our acquisitions through facilities that are
uncommitted. Although we have capacity under our uncommitted
facilities, lenders are not required to loan us any funds under
such facilities. The current disruptions in the capital markets
have caused banks and other credit providers to restrict
availability of borrowing and new credit facilities. Therefore,
future acquisitions may require us to obtain additional
financing, which may not be available on favorable terms or at
all.

To the
extent the availability of free or relatively inexpensive
information increases, the demand for some of our solutions may
decrease.

Public sources of free or relatively inexpensive information
have become increasingly available recently, particularly
through the internet, and this trend is expected to continue.
Governmental agencies in particular have increased the amount of
information to which they provide free public access. Public
sources

of free or relatively inexpensive information may reduce demand
for our solutions. To the extent that customers choose not to
obtain solutions from us and instead rely on information
obtained at little or no cost from these public sources, our
business and results of operations may be adversely affected.

Our
senior leadership team is critical to our continued success and
the loss of such personnel could harm our
business.

Our future success substantially depends on the continued
service and performance of the members of our senior leadership
team. These personnel possess business and technical
capabilities that are difficult to replace. Members of our
senior management operating team have been with us for an
average of almost twenty years. However, with the exception of
Frank J. Coyne, our Chairman and Chief Executive Officer,
we do not expect to have employee contracts with the members of
our senior management operating team following this offering. If
we lose key members of our senior management operating team, we
may not be able to effectively manage our current operations or
meet ongoing and future business challenges, and this may have a
material adverse effect on our business, results of operations
and financial condition.

We may
fail to attract and retain enough qualified employees to support
our operations, which could have an adverse effect on our
ability to expand our business and service our
customers.

Our business relies on large numbers of skilled employees and
our success depends on our ability to attract, train and retain
a sufficient number of qualified employees. If our attrition
rate increases, our operating efficiency and productivity may
decrease. We compete for employees not only with other companies
in our industry but also with companies in other industries,
such as software services, engineering services and financial
services companies, and there is a limited pool of employees who
have the skills and training needed to do our work. If our
business continues to grow, the number of people we will need to
hire will increase. We will also need to increase our hiring if
we are not able to maintain our attrition rate through our
current recruiting and retention policies. Increased competition
for employees could have an adverse effect on our ability to
expand our business and service our customers, as well as cause
us to incur greater personnel expenses and training costs.

We are
subject to antitrust and other litigation, and may in the future
become subject to further such litigation; an adverse outcome in
such litigation could have a material adverse effect on our
financial condition, revenues and profitability.

We participate in businesses (particularly insurance-related
businesses and services) that are subject to substantial
litigation, including antitrust litigation. We are subject to
the provisions of a 1995 settlement agreement in an antitrust
lawsuit brought by various state Attorneys General and private
plaintiffs which imposes certain constraints with respect to
insurer involvement in our governance and business. We currently
are defending against several putative class action lawsuits in
which it is alleged that certain of our subsidiaries unlawfully
have conspired with insurers with respect to their payment of
insurance claims. See Business  Legal
Proceedings. Our failure to successfully defend or settle
such litigation could result in liability that, to the extent
not covered by our insurance, could have a material adverse
effect on our financial condition, revenues and profitability.
Given the nature of our business, we may be subject to similar
litigation in the future. Even if the direct financial impact of
such litigation is not material, settlements or judgments
arising out of such litigation could include further
restrictions on our ability to conduct business, including
potentially the elimination of entire lines of business, which
could increase our cost of doing business and limit our
prospects for future growth.

Our
liquidity, financial position and profitability could be
adversely affected by further deterioration in U.S. and
international credit markets and economic
conditions.

Deterioration in the global capital markets has caused financial
institutions to seek additional capital, merge with larger
financial institutions and, in some cases, fail. These
conditions have led to concerns by market participants about the
stability of financial markets generally and the strength of
counterparties, resulting in a contraction of available credit,
even for the most credit-worthy borrowers. Due to recent market

events, our liquidity and our ability to obtain financing may be
negatively impacted if one of our lenders under our revolving
credit facilities or existing shelf arrangements fails to meet
its funding obligations. In such an event, we may not be able to
draw on all, or a substantial portion, of our uncommitted credit
facilities, which would adversely affect our liquidity. Also, if
we attempt to obtain future financing in addition to, or
replacement of, our existing credit facilities to finance our
continued growth through acquisitions or otherwise, the credit
market turmoil could negatively impact our ability to obtain
such financing.

General
economic, political and market forces and dislocations beyond
our control could reduce demand for our solutions and harm our
business.

The demand for our solutions may be impacted by domestic and
international factors that are beyond our control, including
macroeconomic, political and market conditions, the availability
of short-term and
long-term
funding and capital, the level and volatility of interest rates,
currency exchange rates and inflation. The United States economy
is currently in a recession and both the future domestic and
global economic environments may continue to be less favorable
than those of recent years. Any one or more of these factors may
contribute to reduced activity and prices in the securities
markets generally and could result in a reduction in demand for
our solutions, which could have an adverse effect on our results
of operations and financial condition. The current volatility in
of the credit markets, and its effect on the economy, may
continue to negatively impact financial institutions. A
significant additional decline in the value of assets for which
risk is transferred in market transactions could have an adverse
impact on the demand for our solutions. In addition, the decline
of the credit markets has reduced the number of mortgage
originators, and therefore, the immediate demand for our related
mortgage solutions. Specifically, certain of our fraud detection
and prevention solutions are directed at the mortgage market.
This decline in asset value and originations and an increase in
foreclosure levels has also created greater regulatory scrutiny
of mortgage originations and securitizations. Any new regulatory
regime may change the utility of our solutions for mortgage
lenders and other participants in the mortgage lending industry
and related derivative markets or increase our costs as we adapt
our solutions to new regulation.

Risks
Related to the Offering

There
is no prior public market for our common stock and therefore an
active trading market or any specific price for our common stock
may not be established.

Currently, there is no public trading market for our common
stock. We expect that our Class A common stock will be
listed on the New York Stock Exchange under the symbol
VA. The initial public offering price per share was
determined by agreement among us, the selling stockholders and
the representatives of the underwriters and may not be
indicative of the market price of our common stock after our
initial public offering. An active trading market for our common
stock may not develop and continue upon the completion of this
offering and the market price of our common stock may decline
below the initial public offering price.

The
market price for our common stock may be volatile.

The market price for our common stock is likely to be highly
volatile and subject to wide fluctuations in response to factors
including the following:

continued dislocations and downward pressure in the capital
markets; and



terrorist attacks or natural disasters or other such events
impacting countries where we or our customers have operations.

In addition, securities markets generally and from time to time
experience significant price and volume fluctuations that are
not related to the operating performance of particular
companies. These market fluctuations may have a material adverse
effect on the market price of our common stock.

We
plan to issue a number of options to purchase Class A
common stock to our directors and employees that could dilute
your interest in us.

Upon the closing of this offering we will have up to
3,750,000 shares of Class A common stock available for
issuance to our directors, executive officers and employees in
connection with grants of options to purchase Class A
common stock under our employee benefits arrangements. Issuances
of Class A common stock to our directors, executive
officers and employees pursuant to the exercise of stock options
under our employee benefits arrangements will dilute your
interest in us.

If
there are substantial sales of our common stock, our stock price
could decline.

The market price of our common stock could decline as a result
of sales of a large number of shares of common stock in the
market after this offering or the perception that these sales
could occur. These sales, or the possibility that these sales
may occur, also might make it more difficult for us to sell
equity securities in the future at a time and at a price that we
deem attractive. Upon consummation of this offering, we will
have shares
of common stock outstanding. Of these shares,
the shares
of common stock offered hereby will be freely tradable without
restriction in the public market, unless purchased by our
affiliates.

Following this offering, our existing stockholders will
beneficially own in the aggregate
approximately shares
of our Class A common stock
and shares
of our Class B common stock, representing in aggregate
approximately % of our outstanding
common stock. Such stockholders will be able to sell their
common stock in the public market from time to time without
registering them, subject to the
lock-up
periods described below, and subject to limitations on the
timing, amount and method of those sales imposed by securities
laws. If any of these stockholders were to sell a large number
of their common stock, the market price of our common stock
could decline significantly. In addition, the perception in the
public markets that sales by them might occur could also
adversely affect the market price of our common stock.

In connection with this offering, we, our selling stockholders,
our directors and certain members of our management have each
agreed to enter into a
lock-up
agreement and thereby be subject to a
lock-up
period, meaning that they and their permitted transferees will
not be permitted to sell any of their common stock without the
prior consent of the underwriters for 180 days after the
date of this prospectus. Although we have been advised that
there is no present intention to do so, the underwriters may, in
their sole discretion and without notice, release all or any
portion of the common stock from the restrictions in any of the
lock-up
agreements described above. In addition, certain members of our
management will be subject to
lock-up
agreements with us whereby they will not be permitted to sell
any of their common stock, subject to certain conditions, for a
longer period of time after the pricing of this initial public
offering. See Certain Relationships and Related
Transactions  Letter Agreements.

Also, pursuant to our amended and restated certificate of
incorporation, our Class B stockholders will not be able to
sell any of their common stock, subject to certain conditions,
to the public for a period of time after the pricing of this
initial public offering. Each share of Class B
(Series 1) common stock shall convert automatically,
without any action by the holder, into one share of Class A
common stock 18 months after the date of this prospectus.
Each share of Class B (Series 2) common stock
shall convert automatically, without any action by the holder,
into one share of Class A common stock 24 months after
the date of this prospectus. Our board of directors may approve
exceptions to the limitation on transfers of our Class B
common stock in

their sole discretion, in connection with the sale of such
Class B common stock in a public offering registered with
the Securities and Exchange Commission or in such other limited
circumstances as our board of directors may determine. Any
Class B common stock sold to the public will first be
converted to Class A common stock. Such further resale of
our common stock could cause the price of our common stock to
decline. See Description of Capital Stock 
Common Stock  Conversion.

Pursuant to our equity incentive plans, options to purchase
approximately shares
of Class A common stock will be outstanding upon
consummation of this offering. Following this offering, we
intend to file a registration statement under the Securities Act
registering shares
of Class A common stock which will cover the shares
available for issuance under our equity incentive plans
(including for such outstanding options) as well as shares held
for resale by our existing stockholders that were previously
issued under our equity incentive plans. Such further issuance
and resale of our common stock could cause the price of our
common stock to decline.

Also, in the future, we may issue our securities in connection
with investments and acquisitions. The amount of our common
stock issued in connection with an investment or acquisition
could constitute a material portion of our then outstanding
common stock.

The
holders of our Class B common stock have the right to elect
up to three of our directors and their interests in our business
may be different than yours.

Until no Class B common stock remains outstanding, the
holders of our Class B common stock will have the right to
elect up to three of our directors. Stockholders of the
Class B common stock may not have the same incentive to
approve a corporate action that may be favorable for the holders
of Class A common stock, or their interests may otherwise
conflict with yours. For example, holders of our Class B
common stock may seek to cause us to take courses of action
that, in their judgment, could enhance their investment in us or
the use of our solutions, but which might involve risks to
holders of our Class A common stock, including a potential
decrease in the price of our Class A common stock. See
Description of Capital Stock  Common
Stock  Voting Rights.

Following
this offering, changes in our capital structure and level of
indebtedness and the terms of anti-takeover provisions under
Delaware law and in our amended and restated certificate of
incorporation and bylaws could diminish the value of our common
stock and could make a merger, tender offer or proxy contest
difficult or could impede an attempt to replace or remove our
directors.

We are a Delaware corporation and the anti-takeover provisions
of the Delaware General Corporation Law may discourage, delay or
prevent a change in control by prohibiting us from engaging in a
business combination with an interested stockholder for a period
of three years after the person becomes an interested
stockholder, even if a change of control would be beneficial to
our existing stockholders. In addition, our certificate of
incorporation and bylaws may discourage, delay or prevent a
change in our management or control over us that stockholders
may consider favorable or make it more difficult for
stockholders to replace directors even if stockholders consider
it beneficial to do so. Our certificate of incorporation and
bylaws:



authorize the issuance of blank check preferred
stock that could be issued by our board of directors to increase
the number of outstanding shares to thwart a takeover attempt;



prohibit cumulative voting in the election of directors, which
would otherwise allow holders of less than a majority of the
stock to elect some directors;



require that vacancies on the board of directors, including
newly-created directorships, be filled only by a majority vote
of directors then in office;



limit who may call special meetings of stockholders;



authorize the issuance of authorized but unissued shares of
common stock and preferred stock without stockholder approval,
subject to the rules and regulations of
the ;

prohibit stockholder action by written consent, requiring all
stockholder actions to be taken at a meeting of the
stockholders; and



establish advance notice requirements for nominating candidates
for election to the board of directors or for proposing matters
that can be acted upon by stockholders at stockholder meetings.

In addition, Section 203 of the Delaware General
Corporation Law may inhibit potential acquisition bids for us.
Upon completion of this offering, we will be subject to
Section 203, which regulates corporate acquisitions and
limits the ability of a holder of 15% or more of our stock from
acquiring the rest of our stock. Under Delaware law a
corporation may opt out of the anti-takeover provisions, but we
do not intend to do so.

These provisions may prevent a stockholder from receiving the
benefit from any premium over the market price of our common
stock offered by a bidder in a potential takeover. Even in the
absence of an attempt to effect a change in management or a
takeover attempt, these provisions may adversely affect the
prevailing market price of our common stock if they are viewed
as discouraging takeover attempts in the future.

We
will incur increased costs as a result of being a public
company.

As a privately held company, we have not been responsible for
the corporate governance and financial reporting practices and
policies required of a public company. Following the completion
of this offering, we will be a publicly traded company. Once we
become a public company, we will incur significant legal,
accounting, investor relations and other expenses that we do not
currently incur. In addition, the Sarbanes-Oxley Act of 2002, as
well as new rules implemented by the Securities and Exchange
Commission, the applicable listing rules and rules implemented
by the applicable foreign regulatory agencies, may require
changes in corporate governance practices of public companies.
We expect such rules and regulations to increase our legal and
financial compliance costs and to make some activities more
time-consuming and costly.

We have made statements under the captions Prospectus
Summary, Risk Factors, Managements
Discussion and Analysis of Financial Condition and Results of
Operations, Business and in other sections of
this prospectus that are forward-looking statements. In some
cases, you can identify these statements by forward-looking
words such as may, might,
will, should, expects,
plans, anticipates,
believes, estimates,
predicts, potential or
continue, the negative of these terms and other
comparable terminology. These forward-looking statements, which
are subject to risks, uncertainties and assumptions about us,
may include projections of our future financial performance, our
anticipated growth strategies and anticipated trends in our
business. These statements are only predictions based on our
current expectations and projections about future events. There
are important factors that could cause our actual results, level
of activity, performance or achievements to differ materially
from the results, level of activity, performance or achievements
expressed or implied by the forward-looking statements,
including those factors discussed under the caption entitled
Risk Factors. You should specifically consider the
numerous risks outlined under Risk Factors.

Although we believe the expectations reflected in the
forward-looking statements are reasonable, we cannot guarantee
future results, level of activity, performance or achievements.
Moreover, neither we nor any other person assumes responsibility
for the accuracy and completeness of any of these
forward-looking statements. We are under no duty to update any
of these forward-looking statements after the date of this
prospectus to conform our prior statements to actual results or
revised expectations.

Market data and certain industry data and forecasts used
throughout this prospectus were obtained from internal company
surveys, market research, consultant surveys, publicly available
information, reports of governmental agencies and industry
publications and surveys. We believe the data from third-party
sources to be reliable based upon our managements
knowledge of the industry, but have not independently verified
such data. Certain data and forecasts used in this prospectus
predate the current economic downturn. Our estimates involve
risks and uncertainties and are subject to change based on
various factors, including those discussed under the heading
Risk Factors in this prospectus.

On May 23, 2008, in contemplation of our initial public
offering, we formed Verisk Analytics, Inc., a Delaware
corporation, to be the new holding company for our business. It
was initially formed as a wholly-owned subsidiary of Insurance
Services Office, Inc. Prior to the completion of this offering,
we will have effected an internal reorganization whereby ISO
will become a wholly-owned subsidiary of Verisk and all
outstanding shares of ISO common stock will be replaced with
common stock of Verisk.

This transaction will occur by the stockholders of ISO
exchanging their Class A common stock and Class B
common stock in ISO for Class A common stock and
Class B common stock in Verisk, respectively, on a
one-for-one basis. The Class B common stock of Verisk is
sub-divided equally into two series of Class B common
stock, Class B (Series 1) common stock and
Class B (Series 2) common stock, as described in
this prospectus. As part of this reorganization, our existing
equity based compensation plans will be assigned to Verisk. As a
result, all outstanding options issued under our existing equity
based compensation plans will become options to acquire common
stock of Verisk.

Immediately after the reorganization we will effect an
approximately fifty-for-one split of our common stock in order
to have a price per share equal to the mid-point of the range
set forth on the cover page of this prospectus.

Following this offering and subject to legally available funds,
we currently intend to pay a quarterly dividend, in cash, at an
annual rate initially equal to $
per share of Class A common stock (representing a quarterly
rate initially equal to $ per
share) commencing with the quarter
ended ,
2009. Our Class B common stock will share ratably on an
as-converted basis in such dividends. The declaration and
payment of any dividends will be at the sole discretion of our
board of directors after taking into account various factors,
including our financial condition, operating results, capital
requirements, covenants in our debt instruments, and other
factors that our board of directors deems relevant.

The following table sets forth our capitalization as of
June 30, 2009:



on an actual basis; and



on an as adjusted basis to give effect to changes in the terms
of our capital stock in connection with this initial public
offering and the consequent expiration of our obligations to
redeem our Class A common stock.

This table should be read in conjunction with
Managements Discussion and Analysis of Financial
Condition and Results of Operations and the unaudited
condensed consolidated interim financial statements, and the
consolidated financial statements and notes thereto appearing
elsewhere in this prospectus.

Prior to this offering, we were required to record our
Class A common stock and vested options at redemption value
at each balance sheet date as the redemption of these securities
is not solely within our control, due to our contractual
obligations to redeem these shares. We classify this redemption
value as redeemable common stock. Subsequent to this offering,
we will no longer be obligated to redeem these shares and
therefore we will not be required to record any redeemable
common stock. Refer to note 11 of the unaudited condensed
consolidated interim financial statements for further
information.

(2)

Giving effect to the approximately fifty-for-one stock split
that will have occurred prior to the completion of this offering.

(3)

Prior to the completion of this offering, we intend to
accelerate the allocation of a portion of the shares to the
ESOP, which will result in a
non-recurringnon-cash
charge of approximately $50.0 million, based on the
mid-point of the range set forth on the cover page of this
prospectus.

The following selected historical financial data should be read
in conjunction with, and are qualified by reference to,
Managements Discussion and Analysis of Financial
Condition and Results of Operations and the consolidated
financial statements and notes thereto included elsewhere in
this prospectus. The consolidated statement of operations data
for the years ended December 31, 2006, 2007 and 2008 and
the consolidated balance sheet data as of December 31, 2007
and 2008 are derived from the audited consolidated financial
statements included elsewhere in this prospectus. The
consolidated statement of operations data for the years ended
December 31, 2004 and 2005 and the consolidated balance
sheet data as of December 31, 2004, 2005 and 2006 are
derived from unaudited consolidated financial statements that
are not included in this prospectus. The condensed consolidated
statement of operations data for the six-month periods ended
June 30, 2008 and 2009 and the condensed consolidated
balance sheet data as of June 30, 2009 are derived from
unaudited condensed financial statements that are included in
this prospectus. The condensed consolidated balance sheet data
as of June 30, 2008 is derived from unaudited condensed
financial statements that are not included in this prospectus.
The unaudited condensed consolidated financial statements, in
our opinion, have been prepared on the same basis as the audited
consolidated financial statements and reflect all adjustments,
consisting only of normal recurring adjustments, necessary for a
fair presentation of our results of operations and financial
position. Results for the six-month period ended June 30,
2009 are not necessarily indicative of results that may be
expected for the fiscal year ended December 31, 2009 or any
other future period.

From January 1, 2004 to June 30, 2009 we have acquired
15 businesses, which may affect the comparability of our
financial statements.

As of December 31, 2007, we discontinued operations of our
claim consulting business located in New Hope, Pennsylvania and
the United Kingdom. There was no impact of discontinued
operations on the results of operations for the periods
subsequent to December 31, 2007.

(2)

In conjunction with the initial public offering, the stock of
Insurance Services Office, Inc. will convert to stock of Verisk
Analytics, Inc., which plans to effect a stock split of its
common stock. The numbers in the above table do not reflect this
stock split. Giving effect to the approximately fifty-for-one
stock split that will have occurred prior to the completion of
this offering, pro forma basic and diluted
income/(loss)
per share from continuing operations and discontinued operations
would have been as follows:

Six Months Ended

Year Ended December 31,

June 30,

Basic

2004

2005

2006

2007

2008

2008

2009

Income from continuing operations

$

0.40

$

0.60

$

0.68

$

0.77

$

0.87

$

0.43

$

0.52

Loss from discontinued operations



(0.02

)

(0.01

)

(0.02

)







Net Income per share

$

0.40

$

0.58

$

0.67

$

0.75

$

0.87

$

0.43

$

0.52

Weighted average shares

247,908,050

212,949,450

206,548,100

200,846,400

182,885,700

186,243,800

173,409,800

Diluted

Income from continuing operations

$

0.39

$

0.57

$

0.65

$

0.74

$

0.83

$

0.42

$

0.50

Loss from discontinued operations



(0.01

)

(0.01

)

(0.02

)







Net Income per share

$

0.39

$

0.56

$

0.64

$

0.72

$

0.83

$

0.42

$

0.50

Weighted average shares

258,714,050

223,105,450

215,143,350

209,257,550

190,231,700

193,895,300

180,204,300

(3)

Includes capital lease obligations.

(4)

Prior to this offering, we are required to record our
Class A common stock and vested options at redemption value
at each balance sheet date as the redemption of these securities
is not solely within our control, due to our contractual
obligations to redeem these shares. We classify this redemption
value as redeemable common stock. Subsequent to this offering,
we will no longer be obligated to redeem these shares and
therefore we will not be required to record any redeemable
common stock.

The following discussion should be read in conjunction with
our historical financial statements and the related notes
included elsewhere in this prospectus, as well as the discussion
under Selected Consolidated Financial Data. This
discussion contains forward-looking statements that involve
risks and uncertainties. Our actual results may differ
materially from those discussed in or implied by any of the
forward-looking statements as a result of various factors,
including but not limited to those listed under Risk
Factors and Special Note Regarding Forward-Looking
Statements.

We enable risk-bearing businesses to better understand and
manage their risks. We provide value to our customers by
supplying proprietary data that, combined with our analytic
methods, creates embedded decision support solutions. We are the
largest aggregator and provider of data pertaining to
U.S. property and casualty, or P&C, insurance risks.
We offer solutions for detecting fraud in the U.S. P&C
insurance, mortgage and healthcare industries and sophisticated
methods to predict and quantify loss in diverse contexts ranging
from natural catastrophes to health insurance.

Our customers use our solutions to make better risk decisions
with greater efficiency and discipline. We refer to these
products and services as solutions due to the
integration among our products and the flexibility that enables
our customers to purchase components or the comprehensive
package of products. These solutions take various forms,
including data, statistical models or tailored analytics, all
designed to allow our clients to make more logical decisions. We
believe our solutions for analyzing risk positively impact our
customers revenues and help them better manage their costs.

We organize our business in two segments: Risk Assessment and
Decision Analytics. Our Risk Assessment segment provides
statistical, actuarial and underwriting data for the
U.S. P&C insurance industry. Our Risk Assessment
segment revenues represented approximately 56% and 52% of our
revenues for the year ended December 31, 2008 and the six
months ended June 30, 2009, respectively. Our Decision
Analytics segment provides solutions our customers use to
analyze the four processes of the Verisk Risk Analysis
Framework: Prediction of Loss, Selection and Pricing of Risk,
Detection and Prevention of Fraud, and Quantification of Loss.
Our Decision Analytics segment revenues represented
approximately 44% and 48% of our revenues for the year ended
December 31, 2008 and the six months ended June 30,
2009, respectively.

Executive
Summary

Key
Business Characteristics

We believe we have an attractive operating model due to the
recurring nature of our revenues, the scalability of our
solutions and the low capital intensity of our business.

Recurring Nature of Revenues. We offer our
solutions primarily through annual subscriptions or long-term
agreements, which are generally pre-paid. For the year ended
December 31, 2008 and the six months ended June 30,
2009, 76% and 72% of our revenues, respectively, were derived
from subscriptions and long-term agreements for our solutions.
Approximately 97% of our top 100 customers in 2008, as ranked by
revenues, have been our customers for each of the last five
years. The combination of our historically high renewal rates,
which we believe are due to the embedded nature of our solutions
and our subscription-based revenue model, results in predictable
cash flows.

Low Capital Intensity. We have low capital
needs that allow us to generate strong cash flow. In 2008, our
operating income and capital expenditures, including non-cash
purchases of fixed assets, as a percentage of revenue were 34.8%
and 3.7%, respectively.

We believe our businesss ability to generate recurring
revenue and positive cash flow is the key indicator of the
successful execution of our business strategy. We use revenue
growth and EBITDA margin as metrics to measure our performance.

Revenue growth. We use year over year revenue
growth as a key performance metric. We assess revenue growth
based on our ability to generate increased revenue through
increased sales to existing customers, sales of new or expanded
solutions to existing customers, sales to new customers and
strategic acquisitions of new businesses.

EBITDA margin. We use EBITDA margin as a
metric to assess segment performance and scalability of our
business. We assess EBITDA margin based on our ability to
increase revenues while controlling expense growth.

Revenues

We earn revenues through subscriptions, long-term agreements and
on a transactional basis. Subscriptions for our solutions are
generally paid in advance of rendering services either quarterly
or in full upon commencement of the subscription period, which
is usually for one year and are automatically renewed each year.
As a result, the timing of our cash flows generally precedes our
recognition of revenues and income and our cash flow from
operations tends to be higher in the first quarter as we receive
subscription payments. Examples of these arrangements include
subscriptions that allow our customers to access our
standardized coverage language or our actuarial services
throughout the subscription period. In general, we experience
minimal seasonality within the business. Our long-term
agreements are generally for periods of three to seven years. We
recognize revenue from subscriptions ratably over the term of
the subscription and most long-term agreements are recognized
ratably over the term of the agreement.

Certain of our solutions are also paid for by our customers on a
transactional basis. For example, we have solutions that allow
our customers to access fraud detection tools in the context of
an individual mortgage application, obtain property-specific
rating and underwriting information to price a policy on a
commercial building, or compare a P&C insurance, medical or
workers compensation claim with information in our
databases. For the year ended December 31, 2008 and the six
months ended June 30, 2009, 24% and 28% of our revenues,
respectively, were derived from providing transactional
solutions. We earn transactional revenues as our solutions are
delivered or services performed. In general, transactions are
billed monthly at the end of each month.

More than 82% and 84% of the revenues in our Risk Assessment
segment for the year ended December 31, 2008 and the six
months ended June 30, 2009, respectively, were derived from
subscriptions and long-term agreements for our solutions. Our
customers in this segment include most of the P&C insurance
providers in the United States, and we have retained
approximately 99% of our P&C insurance customer base in
each of the last five years. Within our Risk Assessment segment,
much of our revenues are based on the data we receive from our
customers. The costs for such revenue for the year ended
December 31, 2008 and the six months ended June 30,
2009, were $15.8 million and $9.7 million,
respectively, and have increased as a percentage of revenue from
3.3% to 3.7% of our Risk Assessment segment revenues from
December 31, 2006 to June 30, 2009. More than 68% and
59% of the revenues in our Decision Analytics segment, for the
years ended December 31, 2008 and the six months ended
June 30, 2009, respectively, were derived from
subscriptions and long-term agreements for our solutions.

Principal
Operating Costs and Expenses

Personnel expenses are the major component of both our cost of
revenues and selling, general and administrative expenses.
Personnel expenses include salaries, benefits, incentive
compensation, equity compensation costs (described under
 Equity Compensation Costs below), sales
commissions, employment taxes, recruiting costs and outsourced
temporary agency costs, which represented 63% and 65% of our
total expenses for the year ended December 31, 2008 and the
six months ended June 30, 2009, respectively.

We allocate personnel expenses between two categories, cost of
revenues and selling, general and administrative costs based on
the actual costs associated with each employee. We categorize
employees who maintain our solutions as cost of revenues, and
all other personnel, including executive managers, sales people,

marketing, business development, finance, legal, human resources
and administrative services as selling, general and
administrative expenses. A significant portion of our other
operating costs, such as facilities and communications, are also
either captured within cost of revenues or selling, general and
administrative expense, based on the nature of the work being
performed.

While we expect to grow our headcount over time to take
advantage of our market opportunities, we believe that the
economies of scale in our operating model will allow us to grow
our personnel expenses at a lower rate than revenues.
Historically, our EBITDA margin has improved because we have
been able to increase revenues without a proportionate
corresponding increase in expenses.

Cost of Revenues. Our cost of revenues
consists primarily of personnel expenses. Cost of revenues also
includes the expenses associated with the acquisition and
verification of data, the maintenance of our existing solutions
and the development and enhancement of our next-generation
solutions. Our cost of revenues excludes depreciation and
amortization.

Selling, General and Administrative
Expense. Our selling, general and administrative
expense also consists primarily of personnel costs. A portion of
the other operating costs such as facilities, insurance and
communications are also allocated to selling, general and
administrative costs based on the nature of the work being
performed by the employee.

EBITDA
Margin

Our EBITDA margins for the years ended December 31, 2007
and December 31, 2008, were 42.1% and 42.0%, respectively.
Historically, our EBITDA margin has improved because we have
been able to increase revenues without a proportionate
corresponding increase in expenses. Included within the decrease
in our EBITDA margin for the year ended December 31, 2008
are costs of $6.5 million associated with the preparation
of our initial public offering, representing a 0.7% negative
impact on our EBITDA margin. Our EBITDA margins for the six
months ended June 30, 2008 and June 30, 2009 were
42.9% and 41.9%, respectively. Included within the decrease of
our EBITDA margin for the six months ended June 30, 2009
are increased pension costs of $9.1 million, representing a
1.8% negative impact on our EBITDA margin, due to the effect of
the global economic downturn on our pension investments in 2008,
as further discussed within Critical Accounting Policies
and Estimates, Pension and Postretirement section.

Description
of Acquisitions

As part of our growth strategy, we intend to continue to
selectively acquire companies primarily to augment our Decision
Analytics offerings. We have acquired 10 businesses from January
2006 to June 2009, nine of which are included in our Decision
Analytics segment. Specifically, these companies provide fraud
identification and detection, loss prediction and selection
solutions to the healthcare market. Included in the above was
Xactware, Inc., or Xactware, acquired in 2006, which provides
loss quantification solutions for all phases of building repair
and reconstruction. As a result of these acquisitions, our
consolidated results of operations may not be comparable between
periods.

In 2008, we acquired two entities for an aggregate cash purchase
price of approximately $19.3 million and funded indemnity
escrows totaling $1.5 million. One entity is subject to
additional contingent payments ranging from $0 to a maximum of
$4.5 million potentially payable in 2011 and 2012, based on
achievement of certain predetermined financial results. In 2007,
we acquired three companies for an aggregate cash purchase price
of approximately $50.1 million and funded indemnity and
contingent payment escrows of $3.3 million and
$1.0 million, respectively. As of December 31, 2008,
an entity acquired in 2007 achieved certain financial results,
whereby an additional contingent payment of $15.2 million
was paid in May 2009. In 2006, we acquired four companies for an
aggregate cash purchase price of approximately
$202.1 million, of which $188.0 million relates to
Xactware, and funded indemnity and contingent payment escrows of
$11.1 million and $3.5 million, respectively. Xactware
achieved certain financial results, whereby additional
contingent payments of $98.1 million and $62.9 million
were paid in April 2008 and May 2009, respectively.

On January 14, 2009, we acquired D2Hawkeye or D2, a
privately-owned provider of information and analytic solutions
for the healthcare industry, for a net cash purchase price of
$58.6 million of which

$7.0 million was used to fund the indemnity escrow. D2 is
entitled to receive additional contingent consideration ranging
from $0 to $65.7 million based on achievement of certain
predetermined EBITDA targets for the fiscal year 2011 and
potentially payable in 2012. We have recorded $2.8 million
of contingent consideration from this range, which was estimated
as of the acquisition date by using a weighted average
probability of achieving the specific predetermined EBITDA
targets. As of June 30, 2009, no change in the estimated
contingent consideration was required. Subsequent changes in the
estimated fair value of contingent consideration is recorded in
the statement of operations.

As of June 30, 2009, our indemnity escrows totaled
$21.2 million and are classified as current assets. A
portion of the escrows and other potential acquisition
contingent payments are linked to performance targets. When tied
to continued employment, these contingent payments must be
expensed as compensation. Compensation expense related to these
acquisition contingent payments for the years ended
December 31, 2006, 2007 and 2008 were $9.0 million,
$3.6 million and $0.3 million respectively, and for
the six months ended June 30, 2008 and 2009 were
$0.3 million and $0, respectively.

On July 24, 2009, we acquired the net assets of TierMed
Systems, LLC, or TierMed, a privately owned provider of
Healthcare Effectiveness Data and Information Set, or HEDIS,
software solutions to healthcare organizations that have HEDIS
or quality-reporting needs, for a net cash purchase price of
$7.6 million of which $0.4 million was used to fund
the indemnity escrows. The preliminary allocation of the
purchase price resulted in tangible assets of $0.4 million,
and we are still evaluating the allocation of the purchase price
related to intangible assets and goodwill. TierMed, located in
Chanhassen, Minnesota, complements and is integrated within our
Decision Analytics segment.

Equity
Compensation Costs

We have a leveraged employee stock ownership plan, or ESOP,
funded with intercompany debt that includes 401(k), ESOP and
profit sharing components to provide employees with equity
participation. We make quarterly cash contributions to the plan
equal to the debt service requirements. As the debt is repaid,
shares are released to the ESOP to fund 401(k) matching and
profit sharing contributions and the remainder is allocated
annually to active employees in proportion to their eligible
compensation in relation to total participants eligible
compensation.

We accrue compensation expense over the reporting period equal
to the fair value of the shares to be released to the ESOP.
Depending on the number of shares released to the plan during
the quarter and the fluctuation in the fair value of the shares,
a corresponding increase or decrease in compensation expense
will occur. The amount of our equity compensation costs
recognized for the years ended December 31, 2006, 2007 and
2008 and the six months ended June 30, 2008 and 2009 are as
follows:

Six Months

Ended

Year Ended December 31,

June 30,

2006

2007

2008

2008

2009

(In thousands)

401(k) matching contribution expense:

Risk Assessment

$

4,703

$

4,914

$

5,408

$

2,660

$

2,459

Decision Analytics

2,105

2,788

3,162

1,542

1,794

Total 401(k) matching contribution expense

6,808

7,702

8,570

4,202

4,253

Profit sharing contribution expense:

Risk Assessment



473

720

370

588

Decision Analytics



268

421

215

117

Total profit sharing contribution expense



741

1,141

585

705

ESOP allocation expense:

Risk Assessment

8,105

8,807

7,927

4,289

3,161

Decision Analytics

3,627

4,997

4,636

2,488

2,619

Total ESOP allocation expense

11,732

13,804

12,563

6,777

5,780

Total ESOP cost

$

18,540

$

22,247

$

22,274

$

11,564

$

10,738

Prior to the completion of this offering, we intend to
accelerate the allocation of a portion of the shares to the
ESOP, which will result in a non-recurring non-cash charge of
approximately $50.0 million, based on the mid-point of the
range set forth on the cover page of this prospectus. As a
result, subsequent to the offering, the non-cash ESOP allocation
expense will be substantially reduced. Non-cash charges relating
specifically to our 401(k) and profit sharing were
$6.8 million, $8.4 million and $9.7 million for
the years ended December 31, 2006, 2007 and 2008,
respectively, and were $4.8 million and $5.0 million
for the six months ended June 30, 2008 and 2009,
respectively.

In addition, the portion of the ESOP allocation expense related
to the appreciation of the value of the shares in the ESOP above
the value of those shares when the ESOP was first established is
not tax deductible. Therefore, we believe the accelerated
allocation will result in a reduction of approximately 1.2% to
our effective tax rate in years subsequent to the completion of
our initial public offering.

On January 1, 2005, we adopted FAS No. 123(R),
Share-Based Payment, or FAS No. 123(R), using a
prospective approach, which required us to record compensation
expense for all awards granted after the date of adoption.
Therefore, since January 1, 2005 the expense associated
with the number of options granted has increased every year. For
example, for the year ended December 31, 2005, we expensed
the option grants that vested in 2005, but for the year ended
December 31, 2006, we expensed the portion of the 2005 and
2006 option grants that vested in 2006. Since our options
generally have a four year vesting term, our expense for the
year ending 2009 and subsequent periods will consist of the
vested components of the prior four years of option grants. See
 Critical Accounting Policies and
Estimates  Stock Based Compensation.

Public
Company Expenses

Beginning in 2008, our selling, general and administrative costs
increased as we prepared for this initial public offering. These
costs were $6.5 million and $0.8 million for the year
ended December 31, 2008 and the six months ended
June 30, 2009, respectively. Following the offering, we
will incur additional selling,

general and administrative expenses related to operating as a
public company, such as increased legal and accounting expenses,
the cost of an investor relations function, costs related to
Section 404 of the Sarbanes-Oxley Act of 2002 and increased
director and officer insurance premiums.

Upon the completion of this offering, we expect to grant up to
3,750,000 shares (on a post-split basis) of our
Class A common stock to our directors, officers and
employees in the form of stock options, performance shares,
performance unit awards, restricted shares or restricted stock
awards. Assuming that all of the performance measures are met,
we expect the related expense to be approximately
$1.6 million, $6.2 million, $6.2 million,
$5.8 million, and $3.4 million for 2009, 2010, 2011,
2012, and 2013, respectively. See Management 
Executive Compensation  Verisk Analytics, Inc. 2009
Equity Incentive Plan.

Trends
Affecting Our Business

A portion of our revenues is related to changes in historical
insurance premiums, therefore, our revenues could be positively
or negatively affected by growth or declines in premiums for the
lines of insurance for which we perform services. The pricing of
these solutions is based on an individual customers
premiums in a prior period, so the pricing is fixed at the
inception of each calendar year. The impact of insurance
premiums has a more significant impact on the Risk Assessment
segment than the Decision Analytics segment. Since 2005, premium
growth in the P&C insurance industry has slowed and we
expect little or no growth for most insurance lines during 2009.
A significant portion of our revenues are from insurance
companies. Although business and new sales from these companies
have generally remained strong, the current economic environment
could negatively impact buying demand for our solutions. In
addition, since 2007, the softening of the automobile insurance
market negatively impacted our auto premium leakage
identification solutions. We do not expect this trend to have a
material impact on our liquidity or capital resources.

A portion of our revenues in the Decision Analytics segment are
tied to the volume of applications for new mortgages or
refinancing of existing mortgages. Turmoil in the mortgage
market since 2007 has adversely affected revenue in this segment
of our business. This trend began to reverse in late 2008
spurred by lower mortgage interest rates. As a result of the
rise in foreclosures and early pay defaults, we have seen and
expect to see in the future an increase in revenues from our
solutions that help our customers focus on improved underwriting
quality of mortgage loans. These solutions help to ensure the
application data is accurate and identify and rapidly settle bad
loans, which may have been originated based upon fraudulent
information.

Recent events within the United States economy have resulted in
further tightening in credit availability, which has resulted in
higher interest rates for corporate borrowers. Due to recent
market events, our liquidity and our ability to obtain financing
may be negatively impacted if one of our lenders under our
revolving credit facilities or another financial institution
fails to meet its funding obligations. Borrowings under our
long-term debt facilities are at fixed interest rates. While we
expect future borrowings will be at higher interest rates which
will translate into higher interest expense in the future, we do
not expect this to have a material impact on our business in the
near-term. We have been able to adequately secure credit
arrangements for the financing of our business and have recently
entered into a $300 million committed syndicated revolving
credit facility with Bank of America, N.A., as administrative
agent, on July 2, 2009, which matures on July 2, 2012.
Interest is payable on borrowings under this credit facility at
variable rates of interest based on LIBOR plus 2.50%. We will
continue to explore financing alternatives in order to fund
future growth opportunities.

Set forth below is our results of operations expressed as a
percentage of revenues.

Six Months

Ended

Year Ended December 31,

June 30,

2006

2007

2008

2008

2009

Statement of income data:

Expenses:

Cost of revenues

45.4

%

44.5

%

43.3

%

43.6

%

43.8

%

Selling, general and administrative

13.7

%

13.4

%

14.7

%

13.5

%

14.3

%

Depreciation and amortization of fixed assets

3.8

%

4.0

%

4.0

%

3.8

%

3.8

%

Amortization of intangible assets

3.7

%

4.2

%

3.3

%

3.4

%

3.4

%

Total expenses

66.7

%

66.1

%

65.2

%

64.2

%

65.2

%

Operating income

33.3

%

33.9

%

34.8

%

35.8

%

34.8

%

Other income/(expense):

Interest and investment income/(loss)

0.8

%

1.2

%

(0.0

)%

0.1

%

(0.1

)%

Interest expense

(2.3

)%

(2.9

)%

(3.5

)%

(3.2

)%

(3.3

)%

Total other income/(expense)

(1.4

)%

(1.7

)%

(3.5

)%

(3.2

)%

(3.4

)%

Income from continuing operations before income taxes

31.9

%

32.2

%

31.2

%

32.6

%

31.4

%

Provision for income taxes

(12.6

)%

(12.9

)%

(13.5

)%

(14.1

)%

(13.4

)%

Income from continuing operations

19.3

%

19.3

%

17.7

%

18.5

%

18.0

%

Loss from discontinued operations, net of tax

(0.3

)%

(0.6

)%

0.0

%

0.0

%

0.0

%

Net Income

19.0

%

18.7

%

17.7

%

18.5

%

18.0

%

EBITDA

40.8

%

42.1

%

42.0

%

42.9

%

41.9

%

Six
Months Ended June 30, 2009 Compared to Six Months Ended
June 30, 2008

Consolidated
Results of Operations

Revenues

Revenues were $503.7 million for the six months ended
June 30, 2009 compared to $437.7 million for the six
months ended June 30, 2008, an increase of
$66.0 million or 15.1%. An acquisition in the fourth
quarter of 2008 and an acquisition in the first quarter of 2009
accounted for an increase of $16.0 million in revenues for
the six months ended June 30, 2009. Excluding these
acquisitions, revenues increased $50.0 million, which
included an increase in our Risk Assessment segment of
$9.5 million and an increase in our Decision Analytics
segment of $40.5 million.

Cost of
Revenues

Cost of revenues was $220.5 million for the six months
ended June 30, 2009 compared to $190.7 million for the
six months ended June 30, 2008, an increase of
$29.8 million or 15.6%. The increase was primarily due to
costs related to the newly acquired companies of
$9.3 million and an increase in salaries and employee
benefits costs of $14.9 million, which include annual
salary increases, medical costs and pension cost. Pension cost
represents $7.3 million of the benefits increase due to the
effect of the global economic downturn on our pension
investments in 2008. See Critical Accounting Policies and
Estimates, Pension and Postretirement. Other increases
include data and consultant costs of $6.2 million primarily
in our Decision Analytics segment, and office maintenance fees
of $0.9 million. These increases were partially offset by a
decrease in other expenses of $1.5 million, which included
travel and insurance costs. As a percentage of

revenue, cost of revenues increased to 43.8% for the six months
ended June 30, 2009 from 43.6% for the six months ended
June 30, 2008.

Selling,
General and Administrative Expenses

Selling, general and administrative expenses were
$72.2 million for the six months ended June 30, 2009
compared to $59.0 million for the six months ended
June 30, 2008, an increase of $13.2 million or 22.4%.
The increase was primarily due to an increased salaries and
employee benefits costs of $7.2 million, which include
annual salary increases, medical costs, commission costs of
$1.5 million, and pension cost of $1.8 million across
a relatively constant employee headcount. Other increases were
costs attributable to the newly acquired companies of
$5.2 million and other general expenses of
$1.7 million. This increase was partially offset by a
decrease in legal costs of $0.9 million. As a percentage of
revenue, selling, general and administrative expenses increased
to 14.3% for the six months ended June 30, 2009 from 13.5%
for the six months ended June 30, 2008.

Depreciation
and Amortization of Fixed Assets

Depreciation and amortization of fixed assets were
$18.9 million for the six months ended June 30, 2009
compared to $16.4 million for the six months ended
June 30, 2008, an increase of $2.5 million or 15.2%.
Excluding the impact of an acquisition in the fourth quarter
2008 and an acquisition in the first quarter of 2009,
depreciation increased $1.8 million or 11.0%. Depreciation
and amortization of fixed assets includes depreciation of
furniture and equipment, software, computer hardware, and
related equipment. The majority of the increase relates to
software and hardware costs to support data capacity expansion
and revenue growth. As a percentage of revenue, depreciation and
amortization of fixed assets was 3.8% for both six-month periods
ended June 30, 2008 and 2009.

Amortization
of Intangible Assets

Amortization of intangible assets was $17.0 million for the
six months ended June 30, 2009 compared to
$14.9 million for the six months ended June 30, 2008,
an increase of $2.1 million or 13.6%. The increase was
primarily related to the amortization of the intangible assets
associated with two new acquisitions in fourth quarter 2008 and
first quarter 2009. As a percentage of revenue, amortization of
intangible assets was 3.4% for both six-month periods ended
June 30, 2008 and 2009.

Investment
Income and Realized Gains/(Losses) on Securities, Net

Investment income and realized losses on securities, net was a
loss of $(0.3) million for the six months ended
June 30, 2009 compared to a gain of $0.3 million for
the six months ended June 30, 2008, a decrease of
($0.6) million. Investment income for the first six months
ended June 30, 2009 includes $0.1 million of
investment income, offset by $0.4 million of other than
temporary impairment of securities. Investment income for the
six months ended June 30, 2008, consisted of
$1.6 million of investment income, offset by a $1.3
realized loss on sale of securities. The decrease in investment
income was primarily the result of the termination of the
shareholder loan program in 2008. As a percentage of revenue,
investment income and realized losses on securities, net, was
(0.1%) and 0.1% for the six months ended June 30, 2009 and
2008, respectively.

Interest
Expense

Interest expense was $16.7 million for the six months ended
June 30, 2009 compared to $14.2 million for the six
months ended June 30, 2008, an increase of
$2.5 million or 17.7%. This increase is primarily due to
greater debt outstanding of $689.1 million at June 30,
2009 as compared to $642.2 million at June 30, 2008.
As a percentage of revenue interest expense increased to 3.3%
for the six months ended June 30, 2009 from 3.2% for the
six months ended June 30, 2008.

The provision for income taxes was $67.3 million for the
six months ended June 30, 2009 compared to
$61.8 million for the six months ended June 30, 2008,
an increase of $5.5 million or 8.8%. The effective tax rate
was 42.5% for the six months ended June 30, 2009 compared
to 43.3% for the six months ended June 30, 2008. The 2009
rate is lower due to benefits associated with favorable state
audit settlements in 2009 compared to 2008, as well as certain
nondeductible losses incurred in the prior period for which tax
benefits were not recognized. As a percentage of revenue,
provision for income taxes decreased to 13.4% for the six months
ended June 30, 2009 from 14.1% for the six months ended
June 30, 2008.

EBITDA
Margin

The EBITDA margin for our consolidated results was 41.9% for the
six months ended June 30, 2009 compared to 42.9% for the
six months ended June 30, 2008. Included within the
decrease of our EBITDA margin for the six months ended
June 30, 2009 are increased pension costs of
$9.1 million, representing a 1.8% negative impact on our
EBITDA margin.

Risk
Assessment Results of Operations

Revenues

Revenues for our Risk Assessment segment were
$262.9 million for the six months ended June 30, 2009
compared to $253.4 million for the six months ended
June 30, 2008, an increase of $9.5 million or 3.8%.
The increase in our industry-standard insurance programs
primarily resulted from an increase in prices derived from
continued enhancements to the content of our solutions and the
addition of new customers. Our revenue by category for the
periods presented is set forth below:

Six Months Ended

June 30,

Percentage

2008

2009

Change

(In thousands)

Industry standard insurance programs

$

165,719

$

172,193

3.9

%

Property-specific rating and underwriting information

63,344

65,869

4.0

%

Statistical agency and data services

13,820

14,135

2.3

%

Actuarial services

10,473

10,676

1.9

%

Cost of
Revenues

Cost of revenues for our Risk Assessment segment was
$104.5 million for the six months ended June 30, 2009
compared to $103.1 million for the six months ended
June 30, 2008, an increase of $1.4 million or 1.3%.
The increase was primarily due to an increase in salaries and
employee benefits costs of $4.3 million, primarily related
to pension cost of $6.2 million, resulting from the global
economic downturn experienced in 2008 offset by a decrease in
salaries due to a slight reduction in headcount. There was also
an increase in office maintenance fees of $0.3 million.
This increase was partially offset by a decrease in data and
consultant costs of $1.2 million and in other operating
expenses of $2.1 million, which include decreases in travel
and insurance cost. As a percentage of Risk Assessment revenue,
cost of revenues decreased to 39.7% for the six months ended
June 30, 2009 from 40.7% for the six months ended
June 30, 2008.

Selling,
General and Administrative Expenses

Selling, general and administrative expenses for our Risk
Assessment segment were $37.2 million for the six months
ended June 30, 2009 compared to $36.7 million for the
six months ended June 30, 2008, an increase of
$0.5 million or 1.3%. The increase was primarily due to an
increase in salaries and employee benefit costs of
$2.7 million, which include annual salary increases,
medical costs, commissions of $0.4 million, and pension
cost of $1.4 million, across a relatively constant employee
headcount. There was also an increase in other operating
expenses of $0.2 million. These increases were partially
offset by lower legal costs of $2.4 million primarily due
to higher initial public offering related costs incurred in the
six

months ended June 30, 2008. As a percentage of Risk
Assessment revenue, selling, general and administrative expenses
decreased to 14.2% for the six months ended June 30, 2009
from 14.5% for the six months ended June 30, 2008.

EBITDA
Margin

The EBITDA margin for our Risk Assessment segment was 46.1% for
the six months ended June 30, 2009 compared to 44.8% for
the six months ended June 30, 2008. Included within our
EBITDA margin for the six months ended June 30, 2009 are
increased pension costs of $7.6 million, representing a
2.9% negative impact on our EBITDA margin.

Decision
Analytics Results of Operations

Revenues

Revenues for our Decision Analytics segment were
$240.8 million for the six months ended June 30, 2009
compared to $184.3 million for the six months ended
June 30, 2008, an increase of $56.5 million or 30.6%.
Late in 2008 and in the first quarter 2009, we acquired two
companies. These acquisitions accounted for $16.0 million
of additional revenues for the six months ended June 30,
2009, all of which relates to our loss prediction category.
Excluding the impact of these acquisitions, revenue increased
$40.5 million for the six months ended June 30, 2009.
Our fraud identification and detection solutions revenue
increased $27.6 million primarily in our fraud detection
and forensic audit services for the home mortgage and mortgage
insurance industries as well as in response to the increased
scrutiny and refinancing within the mortgage industry. Our loss
quantification solution revenues increased $8.2 million as
a result of new customer contracts and volume increases
associated with natural disasters experienced in the United
States. Increased revenue in our loss prediction solutions
primarily resulted from our acquisitions and increased
penetration of our existing customers. Our revenue by category
for the periods presented is set forth below:

Six Months Ended

June 30,

Percentage

2008

2009

Change

(In thousands)

Fraud identification and detection solutions

$

102,858

$

130,475

26.8

%

Loss prediction solutions

46,260

66,896

44.6

%

Loss quantification solutions

35,216

43,423

23.3

%

Cost of
Revenues

Cost of revenues for our Decision Analytics segment was
$116.0 million for the six months ended June 30, 2009
compared to $87.5 million for the six months ended
June 30, 2008, an increase of $28.5 million or 32.6%.
The increase included $9.3 million in costs attributable to
the newly acquired companies. Excluding the impact of these
acquisitions, the cost of revenues increased $19.2 million,
primarily due to an increase in salaries and employee benefits
of $10.6 million, which includes annual salary increases,
medical costs, equity compensation costs, and pension cost. This
increase in salaries and benefits is related to a modest
increase in employee headcount relative to the 26.8% revenue
growth in our fraud identification and detection solutions and
to an increase in pension cost of $1.1 million. Other
increases include data and consultant costs of
$7.4 million, office maintenance fees of $0.6 million,
and an increase in other operating expenses of
$0.6 million. As a percentage of Decision Analytics
revenue, cost of revenues increased to 48.2% for the six months
ended June 30, 2009 from 47.5% for the six months ended
June 30, 2008.

Selling,
General and Administrative Expenses

Selling, general and administrative expenses were
$35.0 million for the six months ended June 30, 2009
compared to $22.3 million for the six months ended
June 30, 2008, an increase of $12.7 million or 56.9%.
The increase was due to costs attributable to the newly acquired
companies of $5.2 million, an increase in salaries and
employee benefits costs across a relatively constant employee
headcount of

$4.5 million, which include annual salary increases,
medical claims costs, commission of $1.1 million, and
pension cost of $0.4 million. Other increases include an
increase in legal costs of $1.5 million and other general
expenses of $1.5 million. As a percentage of Decision
Analytics revenue, selling, general and administrative expenses
increased to 14.5% for the six months ended June 30, 2009
from 12.1% for the six months ended June 30, 2008.

EBITDA
Margin

The EBITDA margin for our Decision Analytics segment was 37.3%
for the six months ended June 30, 2009 compared to 40.4%
for the six months ended June 30, 2008. Included within the
decrease of our EBITDA margin for the six months ended
June 30, 2009 were the increased pension costs of
$1.5 million, representing a 0.6% negative impact on our
EBITDA margin.

Year
Ended December 31, 2008 Compared to Year Ended
December 31, 2007

Consolidated
Results of Operations

Revenues

Revenues were $893.6 million for the year ended
December 31, 2008 compared to $802.2 million for the
year ended December 31, 2007, an increase of
$91.4 million or 11.4%. The acquisitions in the latter part
of 2007 and the two acquisitions in 2008 accounted for an
increase of $38.6 million in revenues for the year ended
December 31, 2008. Excluding these acquisitions, revenues
increased $52.8 million, which included an increase in our
Risk Assessment segment of $19.2 million and an increase in
our Decision Analytics segment of $33.6 million.

Cost of
Revenues

Cost of revenues was $386.9 million for the year ended
December 31, 2008 compared to $357.2 million for the
year ended December 31, 2007, an increase of
$29.7 million or 8.3%. The increase was primarily due to
costs attributable to the newly acquired companies of
$25.4 million and an increase in salaries and employee
benefits costs of $1.1 million, which include annual salary
increases, medical costs and long-term incentive plans across a
relatively constant employee headcount. Other increases include
office maintenance fees of $2.8 million, software and data
costs of $3.4 million and other operating expenses of
$0.8 million. These increases were partially offset by
losses on disposal of assets that were $0.5 million less in
the current period as compared to the year ended
December 31, 2007. In addition, acquisition contingent
payments, which are treated as compensation when tied to
continuing employment, were $3.3 million less in the
current period as compared to the year ended December 31,
2007 due to a decrease in the amount of potential acquisition
contingent payments in 2008 compared to 2007. As a percentage of
revenue, cost of revenues decreased to 43.3% for the year ended
December 31, 2008 from 44.5% for the year ended
December 31, 2007.

Selling,
General and Administrative Expenses

Selling, general and administrative expenses were
$131.2 million for the year ended December 31, 2008
compared to $107.6 million for the year ended
December 31, 2007, an increase of $23.6 million or
22.0%. The increase was primarily due to increased salaries and
employee benefits costs of $13.5 million, which include
annual salary increases, medical costs and long-term incentive
plans across a relatively constant employee headcount, an
increase in legal costs of $7.8 million, primarily
resulting from the preparation for our initial public offering,
costs attributable to the newly acquired companies of
$0.9 million, and other general expenses of
$2.5 million. This increase was partially offset by lower
advertising and marketing costs of $1.1 million. As a
percentage of revenues, selling, general and administrative
expenses increased to 14.7% for the year ended December 31,
2008 from 13.4% for the year ended December 31, 2007.

Depreciation and amortization of fixed assets were
$35.3 million for the year ended December 31, 2008
compared to $31.7 million for the year ended
December 31, 2007, an increase of $3.6 million or
11.3%. Depreciation and amortization of fixed assets includes
depreciation of furniture and equipment, software, computer
hardware, and related equipment. As a percentage of revenues,
depreciation and amortization of fixed assets was 4.0% for both
the years ended December 31, 2007 and 2008.

Amortization
of Intangible Assets

Amortization of intangible assets was $29.6 million for the
year ended December 31, 2008 compared to $33.9 million
for the year ended December 31, 2007, a decrease of
$4.3 million or 12.9%. The decrease is the result of
certain intangible assets having been fully amortized in 2007,
partially offset by the increased amortization of intangibles
that resulted from our new acquisitions. We amortize intangible
assets obtained through acquisitions over the periods that we
expect to derive benefit from such assets. As a percentage of
revenues, amortization of intangible assets decreased to 3.3%
for the year ended December 31, 2008 from 4.2% for the year
ended December 31, 2007.

Investment
Income and Realized Gains/(Losses) on Securities, Net

Investment income and realized gains/(losses) on securities, net
was $(0.3) million for the year ended December 31,
2008 compared to $9.3 million for the year ended
December 31, 2007, a decrease of $9.6 million.
Investment income and realized gains/(losses) on securities, net
consists of interest income we receive from our cash and cash
equivalents and stockholder loans, dividend income from our
available-for-sale securities held with certain financial
institutions as well as realized amounts associated with the
sale of available-for-sale securities. The decrease primarily
resulted from reduced interest income of $4.6 million
coupled with the loss on sales of securities of
$1.3 million and other than temporary impairment of
securities of $1.2 million for the year ended
December 31, 2008 as compared to a gain on our investment
portfolio of $2.3 million for the period ended
December 31, 2007. As a percentage of revenues, investment
income and realized gains/(losses) on securities, net decreased
to 0.0% for the year ended December 31, 2008 from 1.2% for
the year ended December 31, 2007.

Interest
Expense

Interest expense was $31.3 million for the year ended
December 31, 2008 compared to $22.9 million for the
year ended December 31, 2007, an increase of
$8.4 million or 36.6%. This increase is primarily due to
greater debt outstanding of $669.8 million at
December 31, 2008 as compared to $438.3 million at
December 31, 2007. As a percentage of revenue interest
expense increased to 3.5% for the year ended December 31,
2008 from 2.9% for the year ended December 31, 2007.

Provision
for Income Taxes

The provision for income taxes was $120.7 million for the
year ended December 31, 2008 compared to
$103.2 million for the year ended December 31, 2007,
an increase of $17.5 million or 16.9%. The effective tax
rate was 43.3% for the year ended December 31, 2008
compared to 40.0% for the year ended December 31, 2007. The
2008 rate is higher due to an increase in FIN 48 uncertain
tax positions and certain initial public offering related costs
that are not tax deductible. As a percentage of revenues,
provision for income taxes increased to 13.5% for the year ended
December 31, 2008 from 12.9% for the year ended
December 31, 2007.

Loss from
Discontinued Operations, Net of Tax

Loss from discontinued operations, net of tax was
$4.6 million for the year ended December 31, 2007,
resulting from costs of $2.9 million to support customer
contracts in our claim consulting business that were terminated
in 2007, and a goodwill impairment charge of $1.7 million.
These costs were partially offset by a net tax benefit of
$1.5 million. There was no loss from discontinued
operations, net of tax in the year

ended December 31, 2008. As a percentage of revenues, loss
from discontinued operations, net of tax was 0.6% for the year
ended December 31, 2007.

EBITDA
Margin

The EBITDA margin for our consolidated results was 42.0% for the
year ended December 31, 2008 compared to 42.1% for the year
ended December 31, 2007. Included within the decrease in
our EBITDA margin are costs of $6.5 million associated with
the preparation for our initial public offering, representing a
0.7% negative impact in EBITDA margin.

Risk
Assessment Results of Operations

Revenues

Revenues for our Risk Assessment segment were
$504.4 million for the year ended December 31, 2008
compared to $485.2 million for the year ended
December 31, 2007, an increase of $19.2 million or
4.0%. The increase was primarily due to an increase in the sales
of our industry-standard insurance programs and actuarial
services. The increase in our industry-standard insurance
programs primarily resulted from an increase in prices derived
from continued enhancements to the content of our solutions and
the addition of new customers. These increases were partially
offset by decreases within property-specific rating and
underwriting information, particularly in rate making and policy
administration solutions and sales of our auto premium leakage
identification solutions, due to a softening in the auto
insurance market. Our revenue by category for the periods
presented is set forth below:

Year Ended

December 31,

Percentage

2007

2008

Change

(In thousands)

Industry standard insurance programs

$

311,087

$

329,858

6.0

%

Property-specific rating and underwriting information

126,291

125,835

(0.4

)%

Statistical agency and data services

27,282

27,451

0.6

%

Actuarial services

20,500

21,247

3.6

%

Cost of
Revenues

Cost of revenues for our Risk Assessment segment was
$199.9 million for the year ended December 31, 2008
compared to $204.2 million for the year ended
December 31, 2007, a decrease of $4.3 million or 2.1%.
The decrease was primarily due to a decrease in salaries and
employee benefits costs of $3.2 million, due to a temporary
reallocation of resources to selling, general and administrative
projects, and a decrease in other operating expenses of
$1.3 million. This reallocation of resources is temporary
and does not impact the headcount. In addition, there was a loss
on disposal of assets of $1.3 million in the year ended
December 31, 2007. The decrease was partially offset by an
increase in office maintenance fees of $1.1 million and an
increase in software and data costs of $0.4 million. As a
percentage of Risk Assessment revenues, cost of revenues
decreased to 39.6% for the year ended December 31, 2008
from 42.1% for the year ended December 31, 2007.

Selling,
General and Administrative Expenses

Selling, general and administrative expenses for our Risk
Assessment segment were $81.8 million for the year ended
December 31, 2008 compared to $68.2 million for the
year ended December 31, 2007, an increase of
$13.6 million or 20.0%. The increase was primarily due to
an increase in salaries and employee benefit costs of
$7.0 million, which include annual salary increases,
medical costs and long-term incentive plans across a relatively
constant employee headcount, an increase in legal fees of
$4.9 million partially associated with the preparation for
our initial public offering, and other general expenses of
$2.0 million. The increase was partially offset by lower
advertising and marketing costs of $0.3 million. As a
percentage of Risk

Assessment revenues, selling, general and administrative
expenses increased to 16.2% for the year ended December 31,
2008 from 14.1% for the year ended December 31, 2007.

EBITDA
Margin

The EBITDA margin for our Risk Assessment segment was 44.2% for
the year ended December 31, 2008 compared to 43.9% for the
year ended December 31, 2007. The increase in EBITDA margin
occurred despite the inclusion of costs totaling
$5.8 million associated with the preparation for our
initial public offering, representing a 1.1% negative impact in
EBITDA margin.

Decision
Analytics Results of Operations

Revenues

Revenues for our Decision Analytics segment were
$389.2 million for the year ended December 31, 2008
compared to $317.0 million for the year ended
December 31, 2007, an increase of $72.2 million or
22.7%. In 2007 and 2008, we acquired three companies and two
companies, respectively. These acquisitions accounted for
$3.9 million and $42.5 million of additional revenues
for the years ended December 31, 2007 and 2008,
respectively. The increase in revenue relating to the
acquisitions was $38.6 million, of which $37.0 million
relates to the fraud and detection solutions category and
$1.6 million relates to the loss prediction category.
Excluding the impact of these acquisitions, revenues increased
$33.6 million for the year ended December 31, 2008.
Our loss quantification revenues increased as a result of new
customer contracts and volume increases associated with recent
floods, hurricanes and wildfires experienced in the United
States. Increased revenue in our loss prediction solutions
resulted from sales to new customers as well as increased
penetration of our existing customers. Excluding acquisitions,
our fraud and detection solutions revenue increased $9.0 million
due to an increase in subscription revenues resulting from
enhancements to the content of our claim solutions, partially
offset by a decrease of $4.8 million in revenues in our
mortgage analytic solutions due to adverse market conditions in
that industry. Our revenue by category for the periods presented
is set forth below:

Year Ended

December 31,

Percentage

2007

2008

Change

(In thousands)

Fraud identification and detection solutions

$

172,726

$

213,994

23.9

%

Loss prediction solutions

81,110

95,128

17.3

%

Loss quantification solutions

63,199

80,037

26.6

%

Cost of
Revenues

Cost of revenues for our Decision Analytics segment was
$187.0 million for the year ended December 31, 2008
compared to $153.0 million for the year ended
December 31, 2007, an increase of $34.0 million or
22.2%. The increase included $25.4 million in costs
attributable to the newly acquired companies. Excluding the
impact of these acquisitions, the cost of revenues increased
$8.6 million, primarily due to an increase in salaries and
employee benefits of $4.3 million across a relatively
constant employee headcount, which includes annual salary
increases, medical costs and equity compensation costs, an
increase in software and data costs of $3.0 million, an
increase in other operating expenses of $2.9 million and an
increase in office maintenance costs of $1.7 million. These
increases were partially offset by lower acquisition contingent
payments of $3.3 million associated with acquisitions
recorded in the comparable prior period. As a percentage of
Decision Analytics revenues, cost of revenues decreased to 48.1%
for the year ended December 31, 2008 from 48.3% for the
year ended December 31, 2007.

Selling,
General and Administrative Expenses

Selling, general and administrative expenses were
$49.4 million for the year ended December 31, 2008
compared to $39.4 million for the year ended
December 31, 2007, an increase of $10.0 million or

25.5%. The increase was due to an increase in salaries and
employee benefits costs of $6.5 million, which include
annual salary increases, medical costs and long-term incentive
plans across a relatively constant employee headcount, an
increase in legal costs of $2.9 million of which
$0.8 million relates to initial public offering costs,
costs attributable to the newly acquired companies of
$0.9 million, and other general expenses of
$0.5 million. This increase was partially offset by lower
advertising and marketing costs of $0.8 million. As a
percentage of Decision Analytics revenues, selling, general and
administrative expenses increased to 12.7% for the year ended
December 31, 2008 from 12.4% for the year ended
December 31, 2007.

EBITDA
Margin

The EBITDA margin for our Decision Analytics segment was 39.2%
for the year ended December 31, 2008 compared to 39.3% for
the year ended December 31, 2007. Included within the
decrease in our EBITDA margin are costs of $0.7 million
associated with the preparation for our initial public offering,
representing a 0.2% negative impact in EBITDA margin.

Year
Ended December 31, 2007 Compared to Year Ended
December 31, 2006

Consolidated
Results of Operations

Revenues

Revenues were $802.2 million for the year ended
December 31, 2007 compared to $730.1 million for the
year ended December 31, 2006, an increase of
$72.1 million or 9.9%. This increase was primarily due to
the inclusion of Xactware, which was acquired in August 2006,
for the full year, as well as several other acquisitions made
during the latter part of 2006 and during 2007. Xactware
contributed $63.2 million in revenues for the year ended
December 31, 2007 compared to $22.2 million for the
year ended December 31, 2006 and revenues from other
acquisitions increased $6.5 million for the year ended
December 31, 2007 compared to the year ended
December 31, 2006. Excluding the impact of these
acquisitions, revenues increased $24.6 million which was
comprised of an increase of $12.5 million in our Risk
Assessment segment and an increase of $12.0 million in our
Decision Analytics segment.

Cost of
Revenues

Cost of revenues was $357.2 million for the year ended
December 31, 2007 compared to $331.8 million for the
year ended December 31, 2006, an increase of
$25.4 million or 7.7%. The increase was primarily due to
$22.7 million in costs attributable to the inclusion of the
full year results of our acquisitions in 2006 and the
acquisitions in 2007. Excluding these acquisitions, our cost of
revenues increased by $2.6 million partially due to an
increase in salaries and benefits of $12.5 million
resulting from growth in headcount and other operating expenses
of $1.0 million. These increases were partially offset by a
decrease in acquisition contingent payments tied to continuing
employment of $8.7 million. As a percentage of revenues,
cost of revenues decreased to 44.5% for the year ended
December 31, 2007 from 45.4% for the year ended
December 31, 2006.

Selling,
General and Administrative Expenses

Selling, general and administrative expenses were
$107.6 million for the year ended December 31, 2007
compared to $100.1 million for the year ended
December 31, 2006, an increase of $7.5 million or
7.4%. The increase was due to $4.2 million in costs
attributable to the inclusion of the results of our acquisitions
in 2006 and 2007. Excluding these acquisitions, our selling,
general and administrative costs increased by $3.3 million
primarily as a result of an increase in salaries and benefits of
$2.4 million, an increase in equity compensation costs of
$1.1 million and an increase in financial system upgrade
costs of $0.7 million and $0.6 million of advertising
costs. These increases were partially offset by a
$1.8 million decrease in sales commission expense resulting
from a change in commission rates in 2007. As a percentage of
revenue, selling, general and administrative expenses decreased
to 13.4% from 13.7%.

Depreciation and amortization of fixed assets were
$31.7 million for the year ended December 31, 2007
compared to $28.0 million for the year ended
December 31, 2006, an increase of $3.7 million or
13.3%. This increase is primarily due to our continuing
investment in developing new products and enhancements to
existing products as well as the continued investment in our
technology infrastructure to support and grow our revenues. As a
percentage of revenue, depreciation and amortization of fixed
assets increased to 4.0% from 3.8%.

Amortization
of Intangible Assets

Amortization of intangibles assets was $33.9 million for
the year ended December 31, 2007 compared to
$26.9 million for the year ended December 31, 2006, an
increase of $7.0 million or 26.3%. This increase is the
result of having a full year of amortization in 2007 on the
intangible assets related to the acquisition of Xactware in
2006, partially offset by the final amortization during 2007 of
intangible assets related to other acquisitions.

Investment
Income and Realized Gains (Losses) on Securities, Net

Investment income and realized gains (losses) on securities, net
was $9.3 million for the year ended December 31, 2007
compared to $6.1 million for the year ended
December 31, 2006, an increase of $3.2 million or
52.6%. This increase is primarily due to a $2.0 million
gain on our investment portfolio as well as an increase of
$1.0 million in interest income primarily earned on
acquisition escrow deposits.

Interest
Expense

Interest expense was $22.9 million for the year ended
December 31, 2007 compared to $16.7 million for the
year ended December 31, 2006, an increase of
$6.2 million or 37.6%. This increase is primarily the
result of an increase in the weighted average balance of debt
outstanding as well as higher rates of interest on long-term
borrowings.

Provision
for Income Taxes

Provision for income taxes was $103.2 million for the year
ended December 31, 2007 compared to $92.0 million for
the year ended December 31, 2006, an increase of
$11.2 million or 12.2%. The effective tax rate was 40.0%
for the year ended December 31, 2007 compared to 39.5% for
the year ended December 31, 2006, which included the
favorable settlement of certain tax contingencies.

Loss from
Discontinued Operations, Net of Tax

Loss from discontinued operations, net of tax was
$4.6 million for the year ended December 31, 2007
compared to $1.8 million for the year ended
December 31, 2006, an increase of $2.8 million or
154.2%, reflecting exit costs, net of tax, including
$1.7 million in the impairment of goodwill, associated with
the discontinuation of our claim consulting business.

Risk
Assessment Results of Operations

Revenues

Revenues for our Risk Assessment segment were
$485.2 million for the year ended December 31, 2007
compared to $472.6 million for the year ended
December 31, 2006, an increase of $12.5 million or
2.7%. The increase was primarily due to an increase in the sales
of our industry-standard insurance programs, which was partially
offset by a decrease in the sales of our auto premium leakage
identification solutions due to a softening in the auto
insurance market. The increase in our industry-standard
insurance programs primarily results from an increase in prices
derived from continued enhancements to the content of our
solutions and to a lesser extent, changes in our customers
premium volumes. Increases from sales of additional lines of our
services to existing customers are offset by lost revenue
resulting from consolidation

within the property and casualty insurance industry. Our revenue
by category for the periods presented is set forth below:

Year Ended

December 31,

Percentage

2006

2007

Change

(In thousands)

Industry standard insurance programs

$

303,957

$

311,087

2.3

%

Property-specific rating and underwriting information

123,627

126,291

2.2

%

Statistical agency and data services

25,793

27,282

5.8

%

Actuarial services

19,257

20,500

6.5

%

Cost of
Revenues

Cost of revenues for our Risk Assessment segment was
$204.2 million for the year ended December 31, 2007
compared to $203.9 million for the year ended
December 31, 2006, an increase of $0.3 million or
0.1%. The increase was primarily due to salary and benefit
increases of $2.0 million and an increase in equity
compensation costs of $2.3 million. These increases were
offset by a decrease in outsourced temporary agency costs of
$1.9 million, a decrease in software maintenance expenses
of $1.2 million, and a decrease in acquisition contingent
payments associated with acquisitions of $1.1 million. As a
percentage of Risk Assessment revenues, cost of revenues
decreased to 42.1% from 43.1%.

Selling,
General and Administrative Expenses

Selling, general and administrative expenses for our Risk
Assessment segment were $68.2 million for the year ended
December 31, 2007 compared to $65.9 million for the
year ended December 31, 2006, an increase of
$2.3 million or 3.5%. The increase was primarily due to an
increase in salary and benefits of $2.0 million,
$0.6 million in costs to upgrade our financial systems and
an increase in equity compensation costs of $0.9 million,
partially offset by a decrease in commission expense of
$1.4 million, resulting from a change in the commission
plan in 2007. As a percentage of Risk Assessment revenues,
selling, general and administrative expenses increased to 14.1%
from 13.9%.

EBITDA
Margin

The EBITDA margin for our Risk Assessment segment was 43.9% for
the year ended December 31, 2007 compared to 42.9% for the
year ended December 31, 2006.

Decision
Analytics Results of Operations

Revenues

Revenues for our Decision Analytics segment were
$317.0 million for the year ended December 31, 2007
compared to $257.5 million for the year ended
December 31, 2006, an increase of $59.5 million or
23.1%. This increase reflects the inclusion of Xactware, our
loss quantification solution, which was acquired in August 2006,
for the full year, as well as several other acquisitions made
during the latter part of 2006 and during 2007. Xactware
contributed $63.2 million in revenues for the year ended
December 31, 2007 compared to $22.2 million for the
year ended December 31, 2006 and the other acquisitions
contributed $6.5 million of additional 2007 revenue
compared to the year ended December 31, 2006. Excluding the
impact of these acquisitions, revenues increased
$12.0 million primarily due to an increase in sales of our
loss prediction solutions resulting from revenue from new
customers as well as increased usage by our existing customers.
Within our fraud identification and detection solutions, growth
in our claims solutions and criminal record

products were offset by decreased revenue of $10.6 million
in our mortgage solutions due to adverse market conditions in
that industry. Our revenue by category for the periods presented
is set forth below:

Year Ended

December 31,

Percentage

2006

2007

Change

(In thousands)

Fraud identification and detection solutions

$

168,189

$

172,726

2.7

%

Loss prediction solutions

67,129

81,110

20.8

%

Loss quantification solutions

22,181

63,199

184.9

%

Cost of
Revenues

Cost of revenues for our Decision Analytics segment was
$153.0 million for the year ended December 31, 2007
compared to $127.9 million for the year ended
December 31, 2006, an increase of $25.1 million or
19.6%. The increase was primarily due to $22.7 million in
costs attributable to the inclusion of the full year results of
our acquisitions in 2006 and the acquisitions completed in 2007.
Excluding these acquisitions, our cost of revenues increased by
$2.4 million, partially due to salary and benefit increases
of $5.9 million, an increase in equity compensation costs
of $1.8 million, an increase in outsourced temporary agency
fees of $2.8 million and an increase of $0.7 million
in leased software, partially offset by a decrease in
acquisition contingent payments tied to continuing employment of
$7.6 million and $1.4 million on disposal of assets.
As a percentage of Decision Analytics revenues, cost of revenues
decreased to 48.3% from 49.7%.

Selling,
General and Administrative Expenses

Selling, general and administrative expenses were
$39.4 million for our Decision Analytics segment for the
year ended December 31, 2007 compared to $34.2 million
for the year ended December 31, 2006, an increase of
$5.2 million or 15.0%. The increase was primarily due to
$4.2 million in costs attributable to the acquired
businesses. Excluding these acquisitions, the increase in
selling, general and administrative expenses was
$1.0 million, primarily due to an increase of
$0.4 million of salaries and benefits and $0.4 million
in advertising costs. As a percentage of Decision Analytics
revenues, selling, general and administrative expenses decreased
to 12.4% from 13.3%.

EBITDA
Margin

The EBITDA margin for our Decision Analytics segment was 39.3%
for the year ended December 31, 2007 compared to 37.0% for
the year ended December 31, 2006.

The following table sets forth our quarterly unaudited
consolidated statement of operations data for each of the eight
quarters in the period ended June 30, 2009. In
managements opinion, the data has been prepared on the
same basis as the audited consolidated financial statements
included in this prospectus, and reflects all necessary
adjustments for a fair presentation of this data. The results of
historical periods are not necessarily indicative of the results
of operations for a full year or any future period.

For the Quarter Ended

September 30,

December 31,

March 31,

June 30,

September 30,

December 31,

March 31,

June 30,

2007

2008

2009

(In thousands)

Statement of income data:

Revenues:

Risk Assessment revenues

$

120,997

$

119,607

$

127,039

$

126,317

$

125,186

$

125,849

$

129,566

$

133,307

Decision Analytics revenues

78,726

82,877

88,579

95,755

99,205

105,620

116,185

$

124,609

Revenues

199,723

202,484

215,618

222,072

224,391

231,469

245,751

257,916

Expenses:

Cost of Revenues

85,343

95,346

93,310

97,368

98,307

97,912

107,523

112,978

Selling, general and administrative

26,989

24,987

28,674

30,354

32,265

39,946

33,320

38,905

Depreciation and amortization of fixed assets

7,799

8,448

7,907

8,517

9,054

9,839

9,195

9,718

Amortization of intangible assets

7,724

8,952

8,041

6,896

7,041

7,577

8,510

8,464

Total expenses

127,855

137,733

137,932

143,135

146,667

155,274

158,548

170,065

Operating income

71,868

64,751

77,686

78,937

77,724

76,195

87,203

87,851

Other income/(expense):

Investment income and realized gains/(losses) on securities, net

1,725

2,620

(458

)

775

2

(646

)

(355

)

82

Interest expense

(5,578

)

(5,876

)

(6,326

)

(7,847

)

(8,393

)

(8,750

)

(8,154

)

(8,523

)

Total other expense, net

(3,853

)

(3,256

)

(6,784

)

(7,072

)

(8,391

)

(9,396

)

(8,509

)

(8,441

)

Income from continuing operations before income taxes

68,015

61,495

70,902

71,865

69,333

66,799

78,694

79,410

Provision for income taxes

(28,841

)

(21,911

)

(29,876

)

(31,942

)

(28,493

)

(30,360

)

(33,779

)

(33,471

)

Income from continuing operations

39,174

39,584

41,026

39,923

40,840

36,439

44,915

45,939

Loss from discontinued operations, net of tax

(2,020

)

(1,267

)













Net income

$

37,154

$

38,317

$

41,026

$

39,923

$

40,840

$

36,439

$

44,915

$

45,939

Other data:

EBITDA:

Risk Assessment EBITDA

$

55,199

$

52,762

$

58,122

$

55,378

$

53,813

$

55,393

$

60,599

$

60,598

Decision Analytics EBITDA

32,192

29,389

35,512

38,972

40,006

38,218

44,309

45,435

EBITDA

$

87,391

$

82,151

$

93,634

$

94,350

$

93,819

$

93,611

$

104,908

$

106,033

Liquidity
and Capital Resources

As of December 31, 2008 and June 30, 2009, we had cash
and cash equivalents and available-for sale securities of
$38.3 million and $51.0 million, respectively.
Subscriptions for our solutions are billed and generally paid in
advance of rendering services either quarterly or in full upon
commencement of the subscription period, which is usually for
one year, and they are automatically renewed at the beginning of
each calendar year. We have historically generated significant
cash flows from operations. As a result of this factor, as well
as the availability of funds under our committed credit
facilities, we believe we will have sufficient cash to meet our
working capital and capital expenditure needs, including
acquisition contingent payments.

We have historically managed the business with a working capital
deficit due to the fact that, as described above, we offer our
solutions and services primarily through annual subscriptions or
long-term contracts, which are generally prepaid quarterly or
annually in advance of the services being rendered. When cash is
received for prepayment of invoices, we record an asset (cash
and cash equivalents) on our balance sheet with the offset
recorded as a current liability (fees received in advance). This
current liability is deferred revenue that does not require a
direct cash outflow since our customers have prepaid and are
obligated to purchase the services. In most businesses, growth
in revenue typically leads to an increase in the accounts
receivable balance

causing a use of cash as a company grows. Unlike these
businesses, our cash position is favorably affected by revenue
growth, which results in a source of cash due to our customers
prepaying for most of our services.

Our capital expenditures, which includes non-cash purchases of
fixed assets, as a percentage of revenues for the years ended
December 31, 2006, 2007 and 2008 were 3.5%, 4.1% and 3.7%,
respectively, and for the six months ended June 30, 2008
and 2009 were 4.4% and 3.7%, respectively. We estimate our
capital expenditures for the remainder of 2009 to be
approximately $22 million, which primarily includes
expenditures on our technology infrastructure and our continuing
investments in developing and enhancing our solutions.
Expenditures related to developing and enhancing our solutions
are predominately related to internal use software and are
capitalized in accordance with AICPA SOP No. 98-1,
Accounting for Costs of Computer Software Developed or
Obtained for Internal Use. The amounts capitalized in
accordance with FAS No. 86 Software to be Sold,
Leased or Otherwise Marketed, are not significant to the
financial statements.

To provide liquidity to our stockholders, we have also
historically used our cash for repurchases of our common stock
from our stockholders. For the years ended December 31,
2006, 2007 and 2008 we repurchased or redeemed
$128.0 million, $204.8 million and $392.6 million,
respectively, of our common stock and for the six months ended
June 30, 2008 and 2009 we repurchased or redeemed
$237.1 million and $38.3 million, respectively, of our
common stock. A substantial portion of the share redemption
included in the totals above were completed pursuant to the
terms of the Insurance Service Office, Inc. 1996 Incentive Plan,
which will automatically terminate upon consummation of this
offering. Therefore, we do not expect to continue our historical
practice of using cash for common stock repurchases to provide
liquidity to our stockholders.

Financing
and Financing Capacity

We had total debt, excluding capital lease and other
obligations, of $440.0 million, $425.0 million and
$659.0 million at December 31, 2006, 2007 and 2008,
respectively, and $679.0 million at June 30, 2009.
Approximately $525.0 million of this debt at June 30,
2009 was held under long-term loan facilities drawn to finance
our stock repurchases and acquisitions and the remaining
$154.0 million was held pursuant to our revolving credit
facilities.

As of June 30, 2009, all of our long-term loan facilities
are uncommitted facilities and our short-term loan facilities
are primarily committed facilities. As noted below, effective
July 2, 2009, our revolving credit facility is committed.

We have long-term loan facilities under uncommitted master shelf
agreements with Prudential Capital Group
(Prudential), New York Life and Aviva Investors
North America (Aviva) with available capacity at
June 30, 2009 in the amount of $115.0 million,
$15.0 million and $20.0 million, respectively. We can
borrow under the Prudential facility until February 28,
2010, under the New York Life facility until March 16,
2010, and under the Aviva facility until December 10, 2011.
Our notes mature over the next seven years. Individual
borrowings are made at a fixed rate of interest and interest is
payable quarterly. The weighted average rate of interest with
respect to our outstanding long-term borrowings was 5.50% and
5.80% for the six months ended June 30, 2008 and 2009,
respectively, and 4.75%, 5.23% and 5.64% for the years
ended December 31, 2006, 2007 and 2008, respectively.

We have financed and expect to finance our short-term working
capital needs and acquisition contingent payments through cash
from operations and borrowings from a combination of our long
term shelf facilities and short-term committed facilities, which
are made at variable rates of interest based on LIBOR plus 0.80%
to 0.95%. We had $114.0 million and $154.0 million in
short-term borrowings outstanding as of December 31, 2008
and June 30, 2009, respectively. We had additional capacity
of $106.0 million in short-term committed credit facilities
at June 30, 2009.

On January 30, 2009, we entered into a $30.0 million
revolving credit facility with Wachovia Bank, N.A. that matures
on September 30, 2009. This facility is committed and
interest is payable at maturity at a rate to be determined at
the time of borrowing. Upon maturity of this facility we may
convert all of or a principal portion not less than
$1.0 million of the aggregate principal balance of
revolving credit loans then

outstanding into a one-year term loan. We did not have any
amount outstanding under this facility as of June 30, 2009.

On April 27, 2009, we issued a senior promissory note under
an uncommitted master shelf agreement with Aviva Investors North
America, Inc. in the aggregate principal amount of
$30.0 million due April 27, 2013. Interest is payable
quarterly at a fixed rate of 6.46%.

On June 15, 2009, we repaid our $100.0 million
Prudential Series D senior notes. In order to pay the Prudential
Series D senior notes, we issued senior promissory notes under
the uncommitted master shelf agreement with Prudential Capital
Group in the aggregate principal amount of $50.0 million
due June 15, 2016 and borrowed $50.0 million from our
revolving credit facility with Bank of America. Interest is
payable quarterly at a fixed rate of 6.85% on the senior
promissory notes.

The uncommitted master shelf agreements and short-term loan
facilities contain certain covenants that limit our ability to
create liens, enter into sale and leaseback transactions and
consolidate, merge or sell assets to another company. The
uncommitted master shelf agreements also contain financial
covenants that require us to maintain a fixed charge coverage of
no less than 275% and a leverage ratio of no more than 300%. As
of December 31, 2008, the Company was in violation of an
affirmative covenant that requires the Company to notify each
lender within 30 days of the time an entity meets the
criteria of a material subsidiary. In February 2009, the
Company obtained a waiver from each of the lenders and amended
its uncommitted master shelf agreements and revolving credit
facilities to have two of its 100% owned subsidiaries, Verisk
Health, Inc. and Interthinx, Inc., fully and unconditionally and
jointly and severally guarantee all of its obligations under the
master shelf agreements and revolving credit facilities.

On July 2, 2009, we entered into a $300.0 million
syndicated revolving credit facility with Bank of America, N.A.,
JPMorgan Chase Bank, N.A., Morgan Stanley Bank, N.A. and Wells
Fargo Bank, N.A. that matures on July 2, 2012. Bank of
America, N.A. and Morgan Stanley Bank, N.A. are affiliates of
the respective underwriters of this offering. On August 21,
2009, PNC Bank, N.A., Sovereign Bank, RBS Citizens, N.A. and
SunTrust Bank joined the syndicated revolving credit facility
increasing the availability to $420.0 million. This
facility is committed with a one time fee of approximately
$4.5 million and ongoing unused facility fee of 0.375%.
Interest is payable at maturity at a rate to be determined at
the time of borrowing. The syndicated revolving credit facility
replaces our previous revolving credit facilities with Bank of
America, JPMorganChase, Morgan Stanley Bank, and Wachovia Bank,
N.A. The credit facility contains certain customary financial
and other covenants that, among other things, impose certain
restrictions on indebtedness, liens, investments, and capital
expenditures. These covenants also place restrictions on
mergers, asset sales, sale and leaseback transactions,
dividends, payments between us and our subsidiaries and certain
transactions with affiliates. The financial covenants require
that at the end of any fiscal quarter, we have a consolidated
interest coverage ratio of at least 3.0 to 1.0 and that during
any period of four fiscal quarters we maintain a consolidated
funded debt leverage ratio of below 3.0 to 1.0.

On July 2, 2009, we borrowed $154.0 million through
the syndicated revolving credit facility to repay
$115.0 million and $39.0 million owed to Bank of
America and JPMorganChase, respectively, as of June 30,
2009. Interest is payable on this borrowing at a weighted
average interest rate of 2.91%. Interest is payable on
borrowings under this credit facility at variable rates of
interest based on LIBOR plus 2.50%.

The following table summarizes our cash flow data for the years
ended December 31, 2006, 2007 and 2008 and for the six
months ended June 30, 2008 and 2009.

For the Six Months

For the Years Ended December 31,

Ended June 30,

2006

2007

2008

2008

2009

(In thousands)

Net cash provided by operating activities

$

223,499

$

248,521

$

247,906

$

141,929

$

184,529

Net cash used in investing activities

$

(243,452

)

$

(110,831

)

$

(130,466

)

$

(98,402

)

$

(152,683

)

Net cash provided by/(used in) financing activities

$

75,907

$

(212,591

)

$

(107,376

)

$

(16,759

)

$

(19,157

)

Operating
Activities

Net cash provided by operating activities increased to
$184.5 million for the six months ended June 30, 2009
from $141.9 million for the six months ended June 30,
2008. The increase in net cash provided by operating activities
was principally due to an increase in cash receipts of
approximately $62.0 million and a decrease in salary and
employee related payments of $10.2 million due to an
additional pay-cycle that occurred during the six months ended
June 30, 2008. Our payroll is processed on a bi-weekly
basis thereby requiring an additional pay-cycle once every ten
years. This increase was partially offset by an increase in
operating expense payments of $14.8 million, an increase in
tax payments of $5.3 million and an increase in interest
payments of $3.9 million during the six months ended
June 30, 2009 compared to the six months ended
June 30, 2008.

Net cash provided by operating activities decreased to
$247.9 million for the year ended December 31, 2008
from $248.5 million for the year ended December 31,
2007. The decrease in net cash provided by operating activities
was principally due to an additional pay-cycle of
$10.2 million that occurred in 2008. In addition, we had a
$5.0 million minimum required funding to our pension plan
and one-time payments associated with the preparation for our
initial public offering. This decrease was mitigated by growth
in net income of $7.9 million and decreased payments
associated with acquisition related liabilities of
$11.5 million. Net cash provided by operating activities
increased to $248.5 million for the year ended
December 31, 2007 from $223.5 million for the year
ended December 31, 2006. The increase in net cash provided
by operating activities from 2006 to 2007 of $25.0 million
was principally due to growth in net income and improved
accounts receivable collections, partially offset by reduced
growth in our cash received in advance from our customers.

Investing
Activities

Net cash used in investing activities was $152.7 million
for the six months ended June 30, 2009 compared to
$98.4 million for the six months ended June 30, 2008.
The increase in net cash used in investing activities was
principally due to the acquisition of D2Hawkeye for
$51.6 million, and increased escrow funding associated with
acquisitions of $3.7 million. In addition, net proceeds
from sales and maturities of available-for-sale securities
declined by $20.8 million during the six months ended
June 30, 2009 compared to the six months ended
June 30, 2008. These increases in net cash used in
investing activities were offset by a $20.0 million
decrease in payment of acquisition related liabilities during
the six months ended June 30, 2009 compared to the six
months ended June 30, 2008.

Net cash used in investing activities was $130.5 million
for the year ended December 31, 2008 and
$110.8 million for the year ended December 31, 2007.
The increase in net cash used in investing activities was
principally due to the payment of acquisition related
liabilities of $98.1 million, resulting from achievement of
post-acquisition performance targets, and the purchase of
cost-method investments of $5.8 million. These increases
are partially offset by decreases in purchases of
available-for-sale
securities of approximately $43.7 million, cash paid for
acquisitions of $31.7 million and cash inflows related to
the termination of the stockholder loan program of
$3.9 million. Net cash used by investing activities was
$110.8 million for the year ended December 31, 2007
and $243.5 million for the year ended December 31,

2006. The decrease in net cash used by investing activities from
2007 to 2006 was principally due to the acquisition of Xactware
during August 2006.

Financing
Activities

Net cash used in financing activities was $19.2 million for
the six months ended June 30, 2009 and $16.8 million
for the six months ended June 30, 2008. Net cash used in
financing activities for the six months ended June 30, 2009
included $38.3 million for redemptions of common stock, an
increase in total debt of $17.3 million and excess tax
benefits from exercised stock options of $0.7 million. Net
cash used in financing activities for the six months ended
June 30, 2008 included $237.1 million for redemptions
of common stock, an increase in total debt of
$202.4 million and excess tax benefits from exercised stock
options of $17.0 million.

Net cash used in financing activities was $107.4 million
for the year ended December 31, 2008 and
$212.6 million for the year ended December 31, 2007.
The decrease in net cash used in financing activities was
principally due to an increase in proceeds from the issuance of
long-term debt and short-term debt of $65.0 million and
$84.0 million, respectively, proceeds from the repayment of
exercise price loans of $29.5 million and a decrease in the
repayment of short-term debt of $100.7 million. These
increases were partially offset by additional repurchases of
common stock of $187.8 million compared to 2007. Net cash
used in financing activities was $212.6 million for the
year ended December 31, 2007 and net cash provided by
financing activities was $75.9 million for the year ended
December 31, 2006. The change in net cash provided by
financing activities from 2007 to 2006 was principally due to
the repurchases of common stock and the repayment of our short
term debt.

Contractual
Obligations

The following table summarizes our contractual obligations and
commercial commitments at December 31, 2008, and the future
periods in which such obligations are expected to be settled in
cash:

Payments Due by Period

Less than

More than

Total

1 Year

1-3 Years

3-5 Years

5 Years

(In thousands)

Contractual obligations

Long-term debt(1)

$

675,637

$

128,890

$

175,279

$

186,189

$

185,279

Capital lease obligations

10,162

5,315

4,800

47



Operating leases

199,662

20,554

39,714

36,174

103,220

Earnout and contingent payment(2)

82,700

82,700







Pension and postretirement(3)

215,221

11,059

79,773

70,206

54,183

Other long-term liabilities(4)

12,914

377

1,106

433

10,998

Total(5)

$

1,196,296

$

248,895

$

300,672

$

293,049

$

353,680

(1)

As of June 30, 2009, our long-term debt due in less than
1 year has decreased approximately $100 million
primarily due to the repayment of $100.0 million Prudential
Series D senior notes. Our debt due in
3-5 years
and more than 5 years periods increased by approximately
$39.0 million and $58.0 million, respectively, due to
the issuance of $30.0 million Aviva Series A senior notes,
and $50.0 million Prudential Series J senior notes,
respectively.

(2)

As of June 30, 2009, we have settled all acquisition
contingent payments.

(3)

Our funding policy is to contribute an amount at least equal to
the minimum legal funding requirement.

(4)

Other long-term liabilities shown in the table above consists of
our ESOP contributions and our employee-related deferred
compensation plan. We also have a deferred compensation plan for
our Board of

Directors; however, based on past performance and the
uncertainty of the dollar amounts to be paid, if any, we have
excluded such amounts from the above table.

(5)

Unrecognized tax benefits of approximately $31.7 million
have been recorded as liabilities in accordance with
FIN 48, which have been omitted from the table above, and
we are uncertain as to if or when such amounts may be settled,
with the exception of those amounts subject to a statute of
limitation. Related to the unrecognized tax benefits, we have
also recorded a liability for potential penalties and interest
of $8.1 million.

Off-Balance
Sheet Arrangements

We have no off-balance sheet arrangements.

Critical
Accounting Policies and Estimates

The preparation of financial statements in conformity with
accounting principles generally accepted in the United States
requires management to make estimates and judgments that affect
reported amounts of assets, liabilities, revenue and expenses,
and disclosure of contingent assets and liabilities. Management
considers the policies discussed below to be critical to
understanding our financial statements because their application
places the most significant demands on managements
judgment, and requires management to make estimates about the
effect of matters that are inherently uncertain. Actual results
may differ from those estimates.

Revenue
Recognition

The Companys revenues are primarily derived from sales of
services and revenue is recognized as services are preformed and
information is delivered to our customers. Revenue is recognized
when persuasive evidence of an arrangement exists, delivery has
occurred or services have been rendered, fees and/or price are
fixed or determinable and collectability is reasonably assured.
Revenues for subscription services are recognized ratably over
the subscription term, usually one year. Revenues from
transaction-based fees are recognized as information is
delivered to customers, assuming all other revenue recognition
criteria are met.

The Company also has term based software licenses where the only
remaining undelivered element is post-contract customer support
or PCS, including unspecified upgrade rights on a when and if
available basis. The Company recognizes revenue for these
licenses ratably over the duration of the license term. The
Company also provides hosting or software solutions that provide
continuous access to information and include PCS and recognizes
revenue ratably over the duration of the license term. In
addition, the determination of certain of our services revenues
requires the use of estimates, principally related to
transaction volumes in instances where these volumes are
reported to us by our clients on a monthly basis in arrears. In
these instances, we estimate transaction volumes based on
average actual volumes reported by our customers in the past.
Differences between our estimates and actual final volumes
reported are recorded in the period in which actual volumes are
reported. We have not experienced significant variances between
our estimates of these services revenues reported to us by our
customers and actual reported volumes in the past.

We invoice our customers in annual, quarterly, or monthly
installments. Amounts billed and collected in advance are
recorded as fees received in advance on the balance sheet and
are recognized as the services are performed and revenue
recognition criteria are met.

Stock-Based
Compensation

On January 1, 2005, we adopted
FAS No. 123(R) using a prospective approach,
which required us to record compensation expense for all awards
granted after the date of adoption. The following table
illustrates the amount of compensation expense resulting from
the implementation of FAS No. 123(R) using the

prospective approach for the years ended December 31,
2006, 2007, 2008 and the six months ended June 30, 2008 and
2009.

For the Six

For the Year Ended

Months Ended

December 31

June 30

2006

2007

2008

2008

2009

(In thousands)

2005 grants

$

2,661

$

2,424

$

2,209

$

1,158

$

724

2006 grants

3,487

2,512

1,870

1,171

780

2007 grants



3,308

2,561

1,313

757

2008 grants





3,241

979

1,647

2009 grants









1,607

Total stock-based compensation

$

6,148

$

8,244

$

9,881

$

4,621

$

5,515

According to FAS No. 123(R) we only use the
prospective approach for the prior four years of grants, each of
which has a four year vesting term, therefore our 2009 financial
statements will reflect compensation expenses relating to grants
primarily from 2006 to 2009.

The fair value of equity awards is measured on the date of grant
using a Black-Scholes option-pricing model, which requires the
use of several estimates, including expected term, expected
risk-free interest rate, expected volatility and expected
dividend yield.

Under FAS No. 123(R), stock-based compensation cost is
measured at the grant date, based on the fair value of the
awards granted, and is recognized as expense over the requisite
service period. Option grants are expensed ratably over the
four-year vesting period. We follow the substantive vesting
period approach for awards granted after the adoption of
FAS No. 123(R), which requires that stock-based
compensation expense be recognized over the period from the date
of grant to the date when the award is no longer contingent on
the employee providing additional service.

We estimate expected forfeitures of equity awards at the date of
grant and recognize compensation expense only for those awards
expected to vest. The forfeiture assumption is ultimately
adjusted to the actual forfeiture rate.

The fair value of the common stock underlying the stock-based
compensation is determined quarterly on or about the final day
of the quarter. The valuation methodology is based on a variety
of qualitative and quantitative factors including the nature of
the business and history of the enterprise, the economic outlook
in general, the condition of the specific industries in which we
operate, the financial condition of the business, our ability to
generate free cash flow, and goodwill or other intangible asset
value.

The fair value of our common stock is determined using generally
accepted valuation methodologies, including the use of the
guideline company method. This determination of fair market
value employs both a comparable company analysis, which examines
the valuation multiples of public companies deemed comparable,
in whole or in part, to us and a discounted cash flow analysis
that determines a present value of the projected future cash
flows of the business. The comparable companies are comprised of
a combination of public companies in the financial services
information and technology businesses. These methodologies have
been consistently applied since 1997. We regularly assess the
underlying assumptions used in the valuation methodologies,
including the comparable companies to be used in the analysis,
the future forecasts of revenue and earnings, and the impact of
market conditions on factors such as the weighted average cost
of capital. These assumptions are reviewed quarterly, with a
more comprehensive evaluation performed annually. For the
comparable company analysis, the share price and financial
performance of these comparables are updated quarterly based on
the most recent public information. Our stock price is also
impacted by the number of shares outstanding. As the number of
shares outstanding has declined over time, our share price has
increased. The determination of the fair value of our common
stock requires us to make judgments that are complex and
inherently subjective. If different assumptions are used in
future periods, stock-based compensation expense could be
materially impacted in the future.

As of December 31, 2008, our share price declined as
compared to the prior year. This decline was primarily due to
the extreme downturn in equity markets adversely impacting the
valuation multiples of our comparable companies. The effect of
the market downturn was partially offset by our solid revenue
growth and productivity improvements that resulted in enhanced
earnings. As of June 30, 2009, our share price increased
primarily due to our strong overall financial performance and
the improvement in the equity markets.

Goodwill
and Intangibles

Goodwill represents the excess of acquisition costs over the
fair value of tangible net assets and identifiable intangible
assets of the businesses acquired. Goodwill and intangible
assets deemed to have indefinite lives are not amortized.
Intangible assets determined to have definite lives are
amortized over their useful lives. Goodwill and intangible
assets with indefinite lives are subject to impairment testing
annually as of June 30, or whenever events or changes in
circumstances indicate that the carrying amount may not be fully
recoverable, using the guidance and criteria described in
FAS No. 142, Goodwill and Other Intangible
Assets. This testing compares carrying values to fair
values and, when appropriate, the carrying value of these assets
is reduced to fair value. For the year ended December 31,
2007, we recorded an impairment charge of $1.7 million
included in loss from discontinued operations, net of tax in the
consolidated statements of operations. During fiscal year 2008,
we performed an impairment test as of June 30, 2008 and
confirmed that no impairment charge was necessary. Due to
several factors, including the current downturn in the equity
markets and the resulting decline of our share price at
December 31, 2008, and the anticipation of our public
offering, we performed an additional impairment test as of
December 31, 2008 and confirmed that goodwill was not
impaired.

As of June 30, 2009, we had goodwill and net intangible
assets of $606.8 million, which represents 60.1% of our
total assets. We completed the required annual impairment test
as of June 30, 2009, which resulted in no impairment of
goodwill. There are many assumptions and estimates used that
directly impact the results of impairment testing, including an
estimate of future expected revenues, earnings and cash flows,
useful lives and discount rates applied to such expected cash
flows in order to estimate fair value. We have the ability to
influence the outcome and ultimate results based on the
assumptions and estimates we choose for determining the fair
value of our reporting units. To mitigate undue influence, we
set criteria and benchmarks that are reviewed and approved by
various levels of management and reviewed by other independent
parties. The determination of whether or not goodwill or
indefinite-lived acquired intangible assets have become impaired
involves a significant level of judgment in the assumptions and
estimates underlying the approach used to determine the value of
our reporting units. Changes in our strategy or market
conditions could significantly impact these judgments and
require adjustments to recorded amounts of intangible assets and
goodwill.

Pension
and Postretirement

In September 2006, the FASB issued FAS No. 158,
Employers Accounting for Defined Benefit Pension
and Other Postretirement Plans. FAS No. 158
requires that employers recognize on a prospective basis the
funded status of their defined benefit pension and other
postretirement benefit plans on their consolidated balance
sheets and recognize as a component of other comprehensive
income (loss), net of tax, the gains or losses and prior service
costs or credits that arise during the period but are not
recognized as components of net periodic benefit cost.
Additional minimum pension liabilities and related intangible
assets are also derecognized upon adoption of the new standard.
We adopted FAS No. 158 as of December 31, 2006.

Certain assumptions are used in the determination of our annual
net period benefit cost and the disclosure of the funded status
of these plans. The principal assumptions concern the discount
rate used to measure the projected benefit obligation, the
expected return on plan assets and the expected rate of future
compensation increases. We revise these assumptions based on an
annual evaluation of long-term trends and market conditions that
may have an impact on the cost of providing retirement benefits.

In determining the discount rate, we utilize quoted rates from
long-term bond indices, and changes in long-term bond rates over
the past year, cash flow models and other data sources we
consider reasonable based upon the profile of the remaining
service life of eligible employees. As part of our evaluation,
we calculate the approximate average yields on securities that
were selected to match our separate projected cash flows for
both the pension and postretirement plans. Our separate benefit
plan cash flows are input into

actuarial models that include data for corporate bonds rated AA
or better at the measurement date. The output from the actuarial
models are assessed against the prior years discount rate
and quoted rates for long-term bond indices. For our pension
plan at December 31, 2008, we determined this rate to be
6.0%, a decrease of 0.25% from the 6.25% rate used at
December 31, 2007. Our postretirement rate is consistent
with our pension plan rate at December 31, 2008.

The expected return on plan assets is determined by taking into
consideration our analysis of our actual historical investment
returns to a broader long-term forecast adjusted based on our
target investment allocation, and the current economic
environment. Our investment guidelines target an investment
portfolio allocation of 40% debt securities and 60% equity
securities. As of December 31, 2008, the plan assets were
allocated 46% debt, 51% equity securities, and 3% to other
investments. We have used our target investment allocation to
derive the expected return as we believe this allocation will be
retained on an ongoing basis that will commensurate with the
projected cash flows of the plan. The expected return for each
investment category within our target investment allocation is
developed using average historical rates of return for each
targeted investment category, considering the projected cash
flow of the pension plan. The difference between this expected
return and the actual return on plan assets is generally
deferred and recognized over subsequent periods through future
net periodic benefit costs. During 2008, the market values of
these investments declined in conjunction with the global
economic downturn. Although the global economic downturn had a
significant effect on the fair value of the plan assets at
December 31, 2008, we believe that the use of the average
historical rates of returns is consistent with the timing and
amounts of expected contributions to the plans and benefit
payments to plan participants. This decline in market value is
the principal reason that net periodic benefit pension cost for
the six months ended June 30, 2009 is $10.0 million as
compared to $0.9 million for the six months ended
June 30, 2008, an increase of $9.1 million. We expect
this increase in net periodic benefit pension cost to continue
in the remaining quarters of 2009 and also that we will have
significantly greater funding obligations in 2010 and thereafter
until the market recovers. We believe these considerations
provide the basis for reasonable assumptions with respect to the
expected long-term rate of return on plan assets.

The rate of compensation increase is based on our long-term
plans for such increases. The measurement date used to determine
the benefit obligation and plan assets is December 31. The
future benefit payments for the postretirement plan are net of
the federal Medical subsidy.

A one percent change in discount rate, future rate of return on
plan assets and the rate of future compensation would have the
following effects:

1% Decrease

1% Increase

Projected Benefit

Projected Benefit

Benefit Cost

Obligation

Benefit Cost

Obligation

(In thousands)

Discount rate

$

256

$

41,123

$

375

$

(34,712

)

Expected return on asset

3,326



(3,326

)



Rate of compensation

(321

)

(2,217

)

340

2,306

A one percent change in assumed healthcare cost trend rates
would have the following effects:

1% Decrease

1% Increase

(In thousands)

Effect on total of service and interest cost components

$

(63

)

$

59

Effect on the healthcare component of the accumulated
postretirement benefit obligation

$

(86

)

$

24

Income
Taxes

In projecting future taxable income, we develop assumptions
including the amount of future state, federal and foreign pretax
operating income, the reversal of temporary differences, and the
implementation of feasible and prudent tax planning strategies.
These assumptions require significant judgment about the
forecasts of future taxable income and are consistent with the
plans and estimates we use to manage the

underlying businesses. The calculation of our tax liabilities
also involves dealing with uncertainties in the application and
evolution of complex tax laws and regulations in other
jurisdictions.

On January 1, 2007, we adopted FASB Interpretation
No. 48, Accounting for Uncertainty in Income Taxes
 an interpretation of FASB Statement
No. 109, or FIN 48. FIN 48 addresses the
determination of whether tax benefits claimed or expected to be
claimed on a tax return should be recorded in the financial
statements. Under FIN 48, we may recognize the tax benefit
from an uncertain tax position only if it is more likely than
not that the tax position will be sustained upon examination by
the taxing authorities, based on the technical merits of the
position. As a result of the implementation of FIN 48, we
recognized an increase in the liability for unrecognized tax
benefits of approximately $10.3 million, which was
accounted for as an increase to the January 1, 2007 balance
of accumulated deficit.

We recognize tax liabilities in accordance with FIN 48 and
we adjust these liabilities when our judgment changes as a
result of the evaluation of new information not previously
available. Due to the complexity of some of these uncertainties,
the ultimate resolution may result in a payment that is
materially different from our current estimate of the tax
liabilities. These differences will be reflected as increases or
decreases to income tax expense in the period in which they are
determined. If the tax liabilities relate to tax uncertainties
existing at the date of the acquisition of a business, the
adjustment of such tax liabilities will result in an adjustment
to the goodwill recorded at the date of acquisition. For any
in-process acquisitions subject to FAS No. 141(R), we
will expense all tax liabilities related to tax uncertainties.

As of December 31, 2008 we have federal and state income
tax net operating loss carryforwards of $88.2 million, which
will expire at various dates from 2009 through 2028. Such net
operating loss carryforwards expire as follows:

2009 - 2016

$

56.8 million

2017 - 2021

0.6 million

2022 - 2028

30.8 million

$

88.2 million

The significant majority of the state net operating loss
carryforwards were generated by a subsidiary that employs our
internal staff as a result of favorable tax deductions from the
exercise of employee stock options for the years ended
December 31, 2005, 2006 and 2007. This subsidiarys
state net operating loss carryforwards will not be utilized
unless the subsidiary is profitable prior to their respective
expiration dates.

We estimate unrecognized tax positions of $2.8 million that may
be recognized by June 30, 2010, due to expiration of
statutes of limitations and resolution of audits with taxing
authorities, net of additional uncertain tax positions.

Recent
Accounting Pronouncements

For a discussion of additional recent accounting pronouncements,
refer to note 2(p) to the audited consolidated financial
statements and note 2 to the unaudited condensed
consolidated financial statements included elsewhere in this
prospectus.

Qualitative
and Quantitative Disclosures about Market Risk

Interest
Rate Risk

We are exposed to market risk from fluctuations in interest
rates. At June 30, 2009 we had borrowings outstanding under
our revolving credit facilities of $154.0 million, which
bear interest at variable rates based on LIBOR plus 0.80% to
0.95%. A change in interest rates on this variable rate debt
impacts our pre-tax income and cash flows, but does not impact
the fair value of the instruments. Based on our overall interest
rate exposure at June 30, 2009, a one percent change in
interest rates would result in a change in annual pretax
interest expense of approximately $1.5 million based on our
current level of borrowings.

We enable risk-bearing businesses to better understand and
manage their risks. We provide value to our customers by
supplying proprietary data that, combined with our analytic
methods, creates embedded decision support solutions. We are the
largest aggregator and provider of detailed actuarial and
underwriting data pertaining to U.S. property and casualty,
or P&C, insurance risks. We offer solutions for detecting
fraud in the U.S. P&C insurance, healthcare and
mortgage industries and sophisticated methods to predict and
quantify loss in diverse contexts ranging from natural
catastrophes to health insurance.

Our customers use our solutions to make better risk decisions
with greater efficiency and discipline. We refer to these
products and services as solutions due to the
integration among our services and the flexibility that enables
our customers to purchase components or the comprehensive
package. These solutions take various forms,
including data, statistical models or tailored analytics, all
designed to allow our clients to make more logical decisions. We
believe our solutions for analyzing risk positively impact our
customers revenues and help them better manage their
costs. In 2008, our U.S. customers included all of the top
100 P&C insurance providers, four of the 10 largest Blue
Cross and Blue Shield plans, four of the six leading mortgage
insurers, 14 of the top 20 mortgage lenders and the 10 largest
global reinsurers. We believe that our commitment to our
customers and the embedded nature of our solutions serve to
strengthen and extend our relationships. For example,
approximately 97% of our top 100 customers in 2008, as ranked by
revenue, have been our customers for each of the last five
years. Further, from 2004 to 2008, revenues generated from these
top 100 customers grew at a compound annual growth rate, or
CAGR, of 12%.

We help those businesses address what we believe are the four
primary decision making processes essential for managing risk as
set forth below in the Verisk Risk Analysis Framework:

The
Verisk Risk Analysis Framework

These four processes correspond to various functional areas
inside our customers operations:



our loss predictions are typically used by P&C insurance
and healthcare actuaries, advanced analytics groups and loss
control groups to help drive their own assessments of future
losses;



our risk selection and pricing solutions are typically used by
underwriters as they manage their books of business;



our fraud detection and prevention tools are used by P&C
insurance, healthcare and mortgage underwriters to root out
fraud prospectively and by claims departments to speed claims
and find fraud retroactively; and



our tools to quantify loss are primarily used by claims
departments, independent adjustors and contractors.

We add value by linking our solutions across these four key
processes; for example, we use the same modeling methods to
support the pricing of homeowners insurance policies and
to quantify the actual losses when damage occurs to insured
homes.

We offer our solutions and services primarily through annual
subscriptions or long-term agreements, which are typically
pre-paid and represented approximately 76% of our revenue in
2008. Our subscription-based revenue model, in combination with
high renewal rates, results in large and predictable cash flows.
For the year ended December 31, 2008 and the six months
ended June 30, 2009, we had revenue of $894 million
and $504 million, respectively, and net income of
$158 million and $91 million, respectively. For the
five year

period ended December 31, 2008, our revenues and net income
have grown at a CAGR of 13.0% and 12.4%, respectively.

We organize our business in two segments: Risk Assessment and
Decision Analytics.

Risk Assessment: We are the leading
provider of statistical, actuarial and underwriting data for the
U.S. P&C insurance industry. Our databases include
cleansed and standardized records describing premiums and losses
in insurance transactions, casualty and property risk attributes
for commercial buildings and their occupants and fire
suppression capabilities of municipalities. Our largest P&C
insurance database, containing information on every transaction
associated with a policy, from inception to information on
losses, includes over 14 billion records, and, in each of
the past three years, we updated the database with over
2 billion validated new records to improve the timeliness,
quality and accuracy of our data and actuarial analysis. We use
our data for example to create policy language and proprietary
risk classifications that are industry-standard and to generate
prospective loss cost estimates used to price insurance policies.

As an example of how customers use our Risk Assessment services,
P&C insurers use our Specific Property Information suite,
or SPI Plus, to underwrite and price commercial property risks.
SPI Plus is built on a proprietary database of approximately
2.7 million buildings and more than 5.4 million
individual businesses occupying those buildings. We maintain
information about each buildings construction, occupancy,
protective features (e.g., sprinkler systems) and exposure to
hazards  collectively known as COPE data 
all of which is critical to our customers decision making
processes. SPI Plus provides detailed narratives regarding
hazards of construction and occupancy and unique
building-specific analytics that assess the adequacy of
sprinkler systems, probable maximum loss due to fire and the
overall hazard level in relation to similar buildings. SPI Plus
also includes our assessments of municipal fire suppression
capability and building code enforcement, and a buildings
exposure to additional perils such as wind, crime and flood
damage. In addition to underwriting and pricing decisions, our
customers use this product for loss cost estimates and to
encourage property owners to reduce hazards and employ
protection features, such as automatic fire-detection,
fire-suppression systems, portable fire extinguishers, standpipe
systems and watchman services. Customers receive our data and
analytics via the internet. Typically, our loss cost estimates
will be automatically entered into an insurers policy
administration system for rating of the insurance policy, while
the COPE data and narrative about the building will be accessed
as the underwriter determines whether or not to offer coverage
for the building.

For the year ended December 31, 2008 and the six months
ended June 30, 2009, our Risk Assessment segment produced
revenue of $504 million and $263 million, representing
56% and 52% of our total revenue, respectively, and EBITDA of
$223 million and $121 million, representing 59% and
57% of our total EBITDA, respectively. This segments
revenue and EBITDA have a CAGR of 5.7% and 7.6%, respectively,
for the five-year period ended December 31, 2008.

Decision Analytics: We provide
solutions in each of the four processes of the Verisk Risk
Analysis Framework by combining algorithms and analytic methods,
which incorporate our proprietary data. Other unique data sets
include over 600 million P&C insurance claims,
historical natural catastrophe data covering more than 50
countries, data from more than 13 million applications for
mortgage loans and over 312 million U.S. criminal
records. Customers integrate our solutions into their models,
formulas or underwriting criteria to predict potential loss
events, ranging from hurricanes and earthquakes to unanticipated
healthcare claims. We are a leading developer of catastrophe and
extreme event models and offer solutions covering natural and
man-made risks, including acts of terrorism. We also develop
solutions that allow customers to quantify costs after loss
events occur. For example, in 2008 we provided repair cost
estimates for more than 60% of the personal property claims paid
in the United States based on total amount of claims paid
according to A.M. Best. Our fraud solutions include data on
claim histories, analysis of mortgage applications to identify
misinformation, analysis of claims to find emerging patterns of
fraud and identification of suspicious claims in the insurance,
healthcare and mortgage sectors.

As an example of how customers use our Decision Analytics
products, our CLASIC/2 enterprise software system is used by
insurance companies to determine potential losses, and the
probability of such losses, for the insurance or reinsurance
they provide in regions prone to natural catastrophes such as

hurricanes, earthquakes, hailstorms and tornadoes. The
catastrophe models underlying our software are based on the
physical principles of meteorology, geology and other sciences,
as well as the statistical analysis of historical time series of
data on prior natural catastrophes. Our software consists of
sophisticated stochastic simulation procedures for projecting
the location and severity of future catastrophes and powerful
computer models of how natural catastrophes behave and impact
buildings and the man-made environment. Our software includes
algorithms that translate estimated losses and insurance terms,
such as coverages and deductibles, into output that guide
underwriters as they select and price risks. Customers receive
our software and host the application on their own servers, and
link their own databases in order to run their risks through our
models. An underwriter can enter the address and characteristics
of a single prospective property in manual mode, or the
underwriter can work in batch mode where the software reads a
file with the addresses and characteristics of many prospective
properties. The software returns a series of estimates of the
total amount of loss likely in the next year including the
amount and cost of damage due to each peril (e.g., earthquake,
hurricane, hailstorms and tornadoes), the total expected loss
from all perils combined, and the estimated average annual loss.
Underwriters use our software to translate damage and loss
estimates into a series of recommendations for structuring
insurance policies including recommended levels of coverage,
deductibles, policy limits and a host of other insurance terms.
All of these terms are then fed into the insurers policy
administration software to determine the premiums to be charged
for insurance.

In addition to analyzing individual risks, insurance companies
can use CLASIC/2s reporting and visualization tools at the
corporate level to assess the aggregate risk and geographic
concentration of entire portfolios of risk to determine capital
adequacy, to decide how much reinsurance to buy, and to assess
the mix of business in their portfolio.

For the year ended December 31, 2008 and the six months
ended June 30, 2009, our Decision Analytics segment
produced revenue of $389 million and $241 million,
representing 44% and 48% of our total revenue, respectively, and
EBITDA of $153 million and $90 million, representing
41% and 43% of our total EBITDA, respectively. This
segments revenue and EBITDA had a CAGR of 28.1% and 41.6%,
respectively, for the five-year period ended December 31,
2008.

Our
Market Opportunity

We believe there is a long-term trend for companies to set
strategy and direct operations using data and analytics to guide
their decisions, which has resulted in a large and rapidly
growing market for professional and business information.
According to a 2008 report from Veronis Suhler Stevenson, an
industry consultant, spending on professional and business
information services in the U.S. reached $46 billion
in 2007 and is projected to grow at a CAGR of 9% through 2012.
Another research firm, International Data Corporation, or IDC,
in a report dated March 2008, estimates that the business
analytics services market, which totaled $32 billion in
2007, will grow at a CAGR of 9% through 2012.

We believe that the consistent decline in the cost of computing
power contributes to the trend towards greater use of data and
analytics. As a result, larger data sets are assembled faster
and at a lower cost per record while the complexity and accuracy
of analytical applications and solutions have expanded. This
trend has led to an increase in the use of analytic output,
which can be generated and applied more quickly, resulting in
more informed decision making. As computing power increases,
cost decreases and accuracy improves, we believe customers will
continue to apply and integrate data and analytic solutions more
broadly.

Companies that engage in risk transactions, including P&C
insurers, healthcare payors and mortgage lenders and insurers,
are particularly motivated to use enhanced analytics because of
several factors affecting risk markets:



the total value of exposures in risk transactions is increasing;



the number of participants in risk transactions is often large
and the asymmetry of information among participants is often
substantial; and



the failure to understand risk can lead to large and rapid
declines in financial performance.

The
total value of exposures in risk transactions is
increasing

Across our target markets, the number and value of the assets
managed in risk transactions exhibits long-term growth. For
example:



U.S. property value exposed to hurricanes continues to
increase dramatically due to population dynamics and increase of
wealth among other factors, with the current trend predicting a
doubling of losses every ten years. At this rate, a repeat of
the 1926 Great Miami hurricane could result in $500 billion
in economic damage as soon as the 2020s according to
Natural Hazards Review; and



U.S. health expenditures have grown at a CAGR of 7% between
1997 and 2007 and are expected to grow over 6% annually through
2018, according to data compiled by the U.S. Department of
Health and Human Services; and



The total value of outstanding U.S. mortgage debt grew from
$10.7 trillion at the end of 2004 to $14.6 trillion at
December 31, 2008, a CAGR of over 8%.

The
number of participants in risk transactions is often large and
the asymmetry of information among participants is often
substantial

Many risk transactions involve multiple participants who either
structure the transaction or bear some of the risk. For example,
in the P&C insurance industry, a single commercial building
might be assessed, underwritten and insured by a combination of
insurance agents and brokers, managing general agents, loss
inspection consultants, underwriters, reinsurers, corporate risk
managers and capital markets participants looking to securitize
the risk of catastrophic loss. In the healthcare industry,
insurers and third-party administrators strive to refine their
understanding of transactions at the point at which care is
delivered to the patient and to determine the legitimacy of
claims filed by providers and insurers. Investors in mortgages
are far removed from the mortgage brokers and lenders who
originate the loans, the appraisers who assess the mortgaged
properties, the servicers who manage the cash flows associated
with the mortgages, and the packagers who assemble pools of
loans to be securitized.

Due to the greater separation of counterparties and the
potential asymmetry of data about underlying risks available to
counterparties, the different participants in such transactions
are in jeopardy of knowing less than their counterparties about
the risk they bear. In the securitization and trading markets,
this problem is exacerbated by the loss of information through
the pooling of risks.

One outcome of asymmetric information is fraudulent
transactions. The Coalition Against Insurance Fraud estimates
that the cost of fraud in the U.S. P&C insurance
industry is as high as $80 billion each year.

The U.S. government estimates fraudulent billings to
U.S. healthcare programs, both public and private, to be
between 3% to 10% of total annual healthcare expenditures, or
between $71 billion and $238 billion in 2008.

Failure
to understand risk can lead to large and rapid declines in
performance

Any company that bears risk will find its profits predominantly
tied directly to its ability to select risks. In the P&C
insurance industry, the cost of goods sold is unknown to the
insurer at the time the insurance policy is written. Therefore,
efficient pricing of insurance policies depends on the ability
to predict the potential losses and costs associated with
underwriting each policy. There are a significant number of
factors which correlate with the size of a potential loss,
including weather, geographic location of risk, insured
characteristics and prior claims costs. An insurance company
differentiates itself by utilizing appropriate and reliable data
and complex analytics to select the risks that will have the
best risk-return profile. The importance of predicting loss in
order to select and price risk, and the linkage of these
analytics to profitability, is true for all companies
participating in risk-bearing transactions.

The current U.S. mortgage crisis provides an example of how
failure to understand risk can lead to a rapid loss of
performance by companies that bear risk. As the housing sector
and mortgage origination market expanded rapidly in the first
half of this decade, the need for underwriting discipline and
risk analysis was underestimated by mortgage brokers, lenders,
investors and regulators. We believe the mortgage
bubble that ended in 2007 masked the need to
integrate analytics into the origination and securitization
processes in order to manage exposures and profits. The rising
level of mortgage default and fraud in 2007 and 2008, combined
with severe contraction in the mortgage origination market, has
forced 199 and 111 of the top originators into failure in 2007
and 2008, respectively, according to the Mortgage Daily. The
Mortgage Bankers Association reports a drop from 5,000 mortgage
bankers in 2007 to 3,500 mortgage bankers in 2008, based upon
lenders that originated at least 100 loans each year. This in
turn has heightened awareness among various participants in the
market of the need to improve the quality of mortgage
underwriting analysis, in part through more sophisticated use of
data. This sophisticated use of data may extend beyond the
acceptance or rejection of risk to include risk-based pricing in
order to enhance financial performance in the face of a
challenging market.

Our customers use our solutions to make better risk decisions
and to price risk appropriately. These solutions are embedded in
our customers critical decision processes. In the
U.S. P&C insurance industry, our solutions for
prospective loss costs, policy language, rating/underwriting
rules and regulatory filing services are the industry standard.
Our decision analytics solutions facilitate the profitable
underwriting of policies. In the U.S. healthcare and
mortgage industries, our predictive models, loss estimation
tools and fraud
identification applications are the primary solutions that allow
customers to understand their risk exposures and proactively
manage them. Over the last three years, we have retained 98% of
our customers across all of our businesses, which we believe
reflects our customers recognition of the value they
derive from our solutions.

Extensive
and Differentiated Data Assets and Analytic
Methods

We maintain what we believe are some of the largest, most
accurate, and most complete databases in the markets we serve.
Our unique, proprietary data assets allow us to provide our
customers with a comprehensive set of risk analytics and
decision support solutions. Our largest data sets are sourced
from our customers and are not available from any other vendor.
Much of the information we provide is not available from any
other source and would be difficult and costly for another party
to replicate. As a result, our accumulated experience and years
of significant investment have given us a competitive advantage
in serving our customers. By continuously adding records to our
data sets we are able to refresh and to refine our data assets,
risk models and other analytic methods.

Our intellectual capital and focus on continuous improvement
have allowed us to develop proprietary algorithms and solutions
that assist our customers in making informed risk decisions. Our
skilled workforce understands issues affecting our targeted
markets and to develop analytic solutions tailored to these
markets. Our team includes approximately 578 individuals with
advanced degrees, certifications and professional designations
in such fields as actuarial science, data management,
mathematics, statistics, economics, soil mechanics, meteorology
and various engineering disciplines. Leveraging the expertise of
our people, we have been able to continuously improve our
operations by constantly enhancing the timeliness, relevance and
quality of our solutions. Over the last three years, we have
retained over 95% of our most highly-rated employees. Over the
last decade, we transitioned our compensation and benefit plans
to be pay-for-performance-oriented, including incentive
compensation plans and greater equity participation by
employees. As of December 31, 2008 and June 30, 2009,
our employees owned approximately 25% of the company.

Attractive
Operating Model

We believe we have an attractive operating model due to the
recurring nature of our revenues, the scalability of our
solutions and the low capital intensity of our business.

Recurring Nature of Revenues. We offer our
solutions and services primarily through annual subscriptions or
long-term agreements, which are generally pre-paid and
represented approximately 76% of our revenues in 2008. The
combination of our historically high renewal rates, which we
believe are due to the embedded nature of our solutions, and our
subscription-based revenue model, results in predictable cash
flows.

Low Capital Intensity. We have low capital
needs that allow us to generate strong cash flow. In 2008, our
operating income and capital expenditures as a percentage of
revenue were 34.8% and 3.7%, respectively.

Our
Growth Strategy

Over the past five fiscal years, we have grown our revenues at a
CAGR of 13.0% through the successful execution of our business
plan. These results reflect strong organic revenue growth, new
product development and selected acquisitions. To build on our
base revenue, we use our intellectual property and customer
relationships to generate insight into where we may more
effectively extract or apply data. We then innovate or adapt
analytics that expand the range, utility and predictive
capabilities of our solutions to grow our revenues profitably.
We have made, and continue to make, investments in people, data
sets, analytic solutions, technology, and complementary
businesses.

To serve our customers and grow our business, we aggressively
pursue the following strategies:

Increase
Sales to Insurance Customers

We expect to expand the application of our solutions in
insurance customers underwriting and claims processes. We
encourage our customers to share more data with us to enhance
the power of our analytics so that our customers can profit from
improved risk management decisions. Building on our deep
knowledge of, and embedded position in, the insurance industry,
we expect to sell more solutions to existing customers tailored
to specific lines of insurance. In addition, as our databases
continue to grow, we believe the predictive capability of our
algorithms will also improve, enhancing the value of our
existing offerings and increasing demand for our solutions. By
increasing the breadth and relevance of our offerings, we
believe we can strengthen our relationships with customers and
increase our value to their decision making in critical ways.

We work with our customers to understand their evolving needs.
We plan to create new solutions by enriching our mix of
proprietary data sets, analytic solutions and effective decision
support across the markets we serve. Our data sets produce
analytics focused on emergent risks and evolving issues within
both new and current customer segments. We constantly seek to
add new data that can further leverage our analytic methods,
technology platforms and intellectual capital. Current areas of
focus in the U.S. include commercial loss histories,
detailed policy level information, vehicle-generated data,
loan-level mortgage data, pharmaceutical claims and healthcare
claims data. We believe this strategy will spur revenue growth
and improve profitability.

Leverage
Our Intellectual Capital to Expand into Adjacent Markets and New
Customer Sectors

Our organization is built on nearly four decades of intellectual
property in risk management. We believe we can continue to
profitably expand the use of our intellectual capital and apply
our analytic methods in new markets, where significant
opportunities for long-term growth exist. For example, we have
leveraged our skills in predictive models for losses in the
healthcare segment into providing predictive analytic solutions
for workers compensation claims. In addition, we are
leveraging our industry-leading solutions for detecting fraud in
mortgage insurance to enhance the accuracy of our mortgage
lending fraud platform. We also continue to pursue growth
through targeted international expansion. We have already
demonstrated the effectiveness of this strategy with our
expansion into healthcare and non-insurance financial services.
We believe there are numerous opportunities to repurpose our
existing data assets and analytic capabilities to expand into
new markets.

We will continue to expand our data and analytics capabilities
across industries. While we expect this will occur primarily
through organic growth, we have and will continue to acquire
assets and businesses that strengthen our value proposition to
customers. We primarily focus on smaller acquisitions of
differentiated proprietary data that is complementary to our
own, analytical applications or models that can leverage our
proprietary data and businesses that address new risk markets.
Our acquisitions have been, and will continue to be, primarily
focused within our Decision Analytics segment. We have developed
an internal capability to source, evaluate and integrate
acquisitions that have created value for shareholders. We have
acquired 15 businesses in the past five years, which in the
aggregate have increased their revenue with a weighted average
CAGR of 31% over the same period.

Our
History

We trace our history to 1971, when Insurance Services Office,
Inc., or ISO, started operations as a not-for-profit advisory
and rating organization providing services for the
U.S. P&C insurance industry. ISO was formed as an
association of insurance companies to gather statistical data
and other information from insurers and report to regulators, as
required by law. ISOs original functions also included
developing programs to help insurers define and manage insurance
products and providing information to help insurers determine
their own independent premium rates. Insurers used and continue
to use our offerings primarily in their product development,
underwriting and rating functions. Today, those businesses form
the core of our Risk Assessment segment.

Over the past decade, we have transformed our business beyond
its original functions by deepening and broadening our data
assets, developing a set of integrated risk management solutions
and services and addressing new markets through our Decision
Analytics segment.

Our expansion into analytics began when we acquired the American
Insurance Services Group and certain operations and assets of
the National Insurance Crime Bureau in 1997 and 1998,
respectively. Those organizations brought to the company large
databases of insurance claims, as well as expertise in detecting
and preventing claims fraud. To further expand our Decision
Analytics segment, we acquired AIR Worldwide in 2002, the
technological leader in catastrophe modeling. In 2004, we
entered the healthcare space by acquiring several businesses
that now offer web-based analytical and reporting systems for
health insurers,

provider organizations and self-insured employers. In 2005 we
entered the mortgage lending sector, acquiring the first of
several businesses that now provide automated fraud detection,
compliance and decision support solutions for the
U.S. mortgage industry. In 2006, to bolster our position in
the claims field we acquired Xactware, a leading supplier of
estimating software for professionals involved in building
repair and reconstruction.

These acquisitions have added scale, geographic reach, highly
skilled workforces, and a wide array of new capabilities to our
Decision Analytics segment. They have helped to make us a
leading provider of information and decision analytics for
customers involved in the business of risk in the U.S. and
selectively around the world.

Our senior management operating team, which includes our chief
executive officer, chief financial officer, chief operating
officer, general counsel and the three senior officers who lead
our largest business units, have been with us for an average of
almost twenty years. This team has led our transformation to a
successful for-profit entity, focused on growth with our
U.S. P&C insurer customers and expansion into a
variety of new markets.

Services

Risk
Assessment Segment

Our Risk Assessment segment serves our P&C insurance
customers and focuses on the first two decision making processes
in our Risk Analysis Framework: prediction of loss and selection
and pricing of risk. Within this segment, we also provide
solutions to help our insurance customers comply with their
reporting requirements in each U.S. state in which they
operate. Our customers include most of the P&C insurance
providers in the United States and we have retained
approximately 99% of our P&C insurance customer base within
the Risk Assessment segment in each of the last five years.

For the year ended December 31, 2008 and the six months
ended June 30, 2009, our Risk Assessment segment produced
revenues of $504 million and $263 million,
representing 56% and 52% of our total revenues, respectively,
and EBITDA of $223 million and $121 million,
representing 59% and 57% of our total EBITDA, respectively. This
segments revenues and EBITDA have a CAGR of 5.7% and 7.6%,
respectively, for the five-year period ended December 31,
2008.

Statistical
Agent and Data Services

The P&C insurance industry is heavily regulated in the
United States. P&C insurers are required to collect
statistical data about their premiums and losses and to report
that data to regulators in every state in which they operate.
Our statistical agent services have enabled P&C insurers to
meet these regulatory requirements for over 30 years. We
aggregate the data and, as a licensed statistical
agent in all 50 states, Puerto Rico and the District
of Columbia, we report these statistics to insurance regulators.
We are able to capture significant economies of scale given the
level of penetration of this service within the
U.S. P&C insurance industry.

To provide our customers and the regulators the information they
require, we maintain one of the largest private databases in the
world. Over the past four decades, we have developed core
expertise in acquiring, processing, managing and operating large
and comprehensive databases that are the foundation of our Risk
Assessment segment. We use our proprietary technology to
assemble, organize and update vast amounts of detailed
information submitted by our customers. We supplement this data
with publicly available information.

Each year, P&C insurers send us approximately
2.5 billion detailed individual records of insurance
transactions, such as insurance premiums collected or losses
incurred. We maintain a database of over 14 billion
statistical records, including approximately 5 billion
commercial lines records and approximately 9 billion
personal lines records. We collect unit-transaction detail of
each premium and loss record, which enhances the validity,
reliability and accuracy of our data sets and our actuarial
analyses. Our proprietary quality process includes almost 2,500
separate checks to ensure that data meet our high standards of
quality.

We provide actuarial services to help our customers price their
risks as they underwrite. We project future losses and loss
expenses utilizing a broad set of data. These projections tend
to be more reliable than if our customers used solely their own
data. We provide loss costs by coverage, class, territory, and
many other categories. Our customers can use our estimates of
future loss costs in making independent decisions about the
prices charged for their policies. For most P&C insurers,
in most lines of business, we believe our loss costs are an
essential input to rating decisions. We make a number of
actuarial adjustments, including loss development and loss
adjustment expenses before the data is used to estimate future
loss costs. Our actuarial services are also used to create the
analytics underlying our industry-standard insurance programs
described below.

Our employees include over 200 actuarial professionals,
including 41 Fellows and 24 Associates of the Casualty
Actuarial Society, as well as 154 Chartered Property
Casualty Underwriters, 12 Certified and 23 Associate
Insurance Data Managers, 178 members of the Insurance Data
Management Association and 145 professionals with advanced
degrees, including PhDs in mathematics and statistical modeling
who review both the data and the models.

Using our large database of premium and loss data, our actuaries
are able to perform sophisticated analyses using our predictive
models and analytic methods to help our P&C insurance
customers with pricing, loss reserving, and marketing. We
distribute a number of actuarial products and offer flexible
services to meet our customers needs. In addition, our
actuarial consultants provide customized services for our
clients that include assisting them with the development of
independent insurance programs, analysis of their own
underwriting experience, development of classification systems
and rating plans and a wide variety of other business decisions.
We also supply information to a wide variety of customers in
other markets including reinsurance, government agencies and
real estate.

Industry-Standard
Insurance Programs

We are the recognized leader in the United States for
industry-standard insurance programs that help P&C insurers
define coverages and issue policies. Our policy language,
prospective loss cost information and policy writing rules can
serve as integrated turnkey insurance programs for our
customers. Insurance companies need to ensure that their policy
language, rules, and rates comply with all applicable legal and
regulatory requirements. Insurers must also make sure their
policies remain competitive by promptly changing coverages in
response to changes in statutes or case law. To meet their
needs, we process and interface with state regulators on average
over 4,000 filings each year, ensuring smooth implementation of
our rules and forms. When insurers choose to develop their own
alternative programs, our industry-standard insurance programs
also help regulators make sure that such insurers policies
meet basic coverage requirements.

Standardized coverage language, which has been tested in
litigation and tailored to reflect judicial interpretation,
helps to ensure consistent treatment of claimants. As a result,
our industry-standard language also simplifies claim settlements
and can reduce the occurrence of costly litigation, because our
language causes the meaning of coverage terminology to become
established and known. Our policy language includes standard
coverage language, endorsements and policy writing support
language that assist our customers in understanding the risks
they assume and the coverages they are offering. With these
policy programs, insurers also benefit from economies of scale.
We have over 200 specialized lawyers and insurance experts
reviewing changes in each states insurance rules and
regulations, including on average over 11,000 legislative bills,
750 regulatory actions and 2,000 court cases per year, to
make any required changes to our policy language and rating
information.

To cover the wide variety of risks in the marketplace, we offer
a broad range of policy programs. For example, in the
homeowners line of insurance, we maintain policy language
and rules for six basic coverages, 172 national endorsements,
and 469 state-specific endorsements. Overall, we provide
policy language, prospective loss costs, policy writing rules
and a variety of other solutions for 24 lines of insurance.

We gather information on individual properties and communities
so that insurers can use our information to evaluate and price
personal and commercial property insurance, as well as
commercial liability insurance. Our property-specific rating and
underwriting information allow our customers to understand,
quantify, underwrite, mitigate and avoid potential loss for
residential and commercial properties. Our database contains
loss costs and other vital information on approximately
2.7 million commercial buildings in the United States and
also holds information on approximately 4.5 million
individual businesses occupying those buildings. We have a staff
of more than 600 field representatives strategically located
around the United States who observe and report on conditions at
commercial and residential properties, evaluate community
fire-protection capabilities and assess the effectiveness of
municipal building-code enforcement. Each year, our field staff
visits over 350,000 commercial properties to collect information
on new buildings and verify building attributes.

We also provide proprietary analytic measures of the ability of
individual communities to mitigate losses from important perils.
Nearly every property insurer in the United States uses our
evaluations of community firefighting capabilities to help
determine premiums for fire insurance throughout the country. We
provide field-verified and validated data on the fire protection
services for more than 46,000 fire response jurisdictions. We
also offer services to evaluate the effectiveness of community
enforcement of building codes and the efforts of communities to
mitigate damage from flooding. Further, we provide information
on the insurance rating territories, premium taxes, crime risk
and hazards of windstorm, earthquake, wildfire and other perils.
To supplement our data on specific commercial properties and
individual communities, we have assembled, from a variety of
internal and third-party sources, information on hazards related
to geographic locations representing every postal address in the
United States. Insurers use this information not only for policy
quoting but also for analyzing risk concentration in
geographical areas.

Decision
Analytics Segment

In the Decision Analytics segment, we support all four phases of
our Risk Analysis Framework. We develop predictive models to
forecast scenarios and produce both standard and customized
analytics that help our customers better predict loss; select
and price risk; detect fraud before and after a loss event; and
quantify losses.

As we develop our models to quantify loss and detect fraud, we
improve our ability to predict the loss and prevent the fraud
from happening. We believe this provides us with a significant
competitive advantage over firms that do not offer solutions
which operate both before and after loss events.

For the year ended December 31, 2008 and the six months
ended June 30, 2009, our Decision Analytics segment
produced revenues of $389 million and $241 million,
representing 44% and 48% of our total revenues, respectively,
and EBITDA of $153 million and $90 million,
representing 41% and 43% of our total EBITDA, respectively. This
segments revenues and EBITDA have a CAGR of 28.1% and
41.6%, respectively, for the five-year period ended
December 31, 2008.

Fraud
Detection and Prevention

P&C
Insurance

We are a leading provider of fraud-detection tools for the
P&C insurance industry. Our fraud solutions improve our
customers profitability by both predicting the likelihood
that fraud is occurring and detecting suspicious activity after
it has occurred. When a claim is submitted, our system searches
our database and returns information about other claims filed by
the same individuals or businesses (either as claimants or
insurers) that help our customers determine if fraud has
occurred. The system searches for matches in identifying
information fields, such as name, address, Social Security
number, vehicle identification number, drivers license
number, tax identification number, or other parties to the loss.
Our system also includes advanced name and address searching to
perform intelligent searches and improve the overall quality of
the matches. Information from match reports speeds payment of
meritorious claims while providing a defense against fraud and
can lead to denial of a claim, negotiation of a reduced award,
or further investigation by the insurer or law enforcement.

We have a comprehensive system used by claims adjusters and
investigations professionals to process claims and fight fraud.
Claims databases are one of the key tools in the fight against
insurance fraud. The benefits of a single all-claims database
include improved efficiency in reporting data and searching for
information, enhanced capabilities for detecting suspicious
claims, and superior information for investigating fraudulent
claims, suspicious individuals and possible fraud rings. Our
database contains information on more than 600 million
claims and is the worlds largest database of claims
information. Insurers and other participants submit new claim
reports, more than 238,000 a day on average, across all
categories of the U.S. P&C insurance industry.

We also provide a service allowing insurers to report thefts of
automobiles and property, improving the chances of recovering
those items; a service that helps owners and insurers recover
stolen heavy construction and agricultural equipment; an expert
scoring system that helps distinguish between suspicious and
meritorious claims; and products that use link-analysis
technology to help visualize and fight insurance fraud.

We have begun to expand our fraud solutions to overseas markets.
We built and launched a system in Israel in 2006 that provides
claims fraud detection, claims investigation support and some
underwriting services to all Israeli insurers.

Mortgage

We are a leading provider of automated fraud detection,
compliance and decision-support tools for the mortgage industry.
Utilizing our own loan level application database combined with
actual mortgage loan performance data, we have established a
risk scoring system which increases our customers ability
to detect fraud. We provide solutions that detect fraud through
each step of the mortgage lifecycle and provide regulatory
compliance solutions that perform instant compliance reviews of
each mortgage application. Our fraud solutions can improve our
customers profitability by predicting the likelihood that
a customer account is experiencing fraud. Our solution analyzes
customer transactions in real time and generates recommendations
for immediate action which are critical to stopping fraud and
abuse. These applications can also detect some organized fraud
schemes that are too complex and well-hidden to be identified by
other methods.

Effective fraud detection relies on pattern identification,
which in turn requires us to identify, isolate and track
mortgage applications through time. Histories of multiple loans,
both valid and fraudulent, are required to compare a submitted
loan both to actual data and heuristic analyses. For this
reason, unless fraud

detection solutions are fueled by comprehensive data, their
practicality is limited. Our proprietary database contains more
than 13 million current and historical loan applications
collected over the past three years. This database contains data
from loan applications as well as supplementary third-party data.

Our technology employs sophisticated models to identify patterns
in the data. Our solution provides a score which predicts
whether the information provided by a mortgage applicant is
correct. Working with data obtained through our partnership with
a credit bureau, we have demonstrated a strong correlation
between fraudulent information in the application and the
likelihood of both foreclosure and early payment default on
loans. We believe our solution is based upon a more
comprehensive set of loan level information than any other
provider in the mortgage industry.

We also provide forensic audit services for the mortgage
origination and mortgage insurance industries. Our predictive
screening tools predict which defaulted loans are the most
likely candidates for full audits for the purpose of detecting
fraud. We then generate detailed audit reports on defaulted
mortgage loans. Those reports serve as a key component of the
loss mitigation strategies of mortgage loan insurers. The recent
turmoil in the mortgage industry has created a period of
unprecedented opportunity for growth in demand for our services,
as we believe most mortgage insurers do not have the in-house
capacity to respond to, and properly review, all of their
defaulted loans for evidence of fraud.

Healthcare

We offer solutions that help healthcare claims payors detect
fraud, abuse and overpayment. Our approach combines
computer-based modeling and profiling of claims with analysis
performed by clinical experts. We run our customers claims
through our proprietary analytic system to identify potential
fraud, abuse and overpayment, and then a registered nurse,
physician, or other clinical specialist skilled in coding and
reimbursement decisions reviews all suspect claims and billing
patterns. This combination of system and human review is unique
in the industry and we believe offers improved accuracy for
paying claims.

We analyze the patterns of claims produced by individual
physicians, physicians practices, hospitals, dentists and
pharmacies to locate the sources of fraud. After a suspicious
source of claims is identified, our real-time analytic solutions
investigate each claim individually for particular violations
including upcoding, multiple billings, services claimed but not
rendered and billing by unlicensed providers. By finding the
individual claims with the most cost-recovery potential, and
also minimizing the number of false-positive indications of
fraud, we enable the special investigation units of healthcare
payors to efficiently control their claims costs while
maintaining high levels of customer service to their insurers.

We also offer web-based reporting tools that let payors take
definitive action to prevent overpayments or payment of
fraudulent claims. The tools provide the documentation that
helps to identify, investigate, and prevent abusive and
fraudulent activity by providers.

Prediction
of Loss and Selection and Pricing of Risk

P&C
Insurance

We pioneered the field of probabilistic catastrophe modeling
used by insurers, reinsurers and financial institutions to
manage their catastrophe risk. Our models of global natural
hazards, which form the basis of our solutions, enable companies
to identify, quantify, and plan for the financial consequences
of catastrophic events. We have developed models covering
natural hazards, including hurricanes, earthquakes, winter
storms, tornadoes, hailstorms and flood for potential loss
events in more than 50 countries. We have also developed and
introduced a probabilistic terrorism model capable of
quantifying the risk in the United States from this emerging
threat, which supports pricing and underwriting decisions down
to the level of an individual policy.

Healthcare

We are a leading provider of healthcare business intelligence
and predictive modeling. We provide analytical and reporting
systems to health insurers, provider organizations and
self-insured employers. Those

organizations use our solutions to review their healthcare data,
including information on claims, membership, providers and
utilization, and provide cost trends, forecasts and actuarial,
financial and utilization analyses.

We also provide our customers healthcare consulting services
using complex clinical analyses to uncover reasons behind cost
and utilization increases. Physicians and hospitals are adopting
and acquiring new technologies, drugs and devices more rapidly
than ever before. We provide financial and actuarial consulting,
clinical consulting, technical and implementation services and
training services to help our customers manage costs and risks
to their practices.

We are also beginning to expand our healthcare business
internationally. We have recently secured an agreement with the
German government to develop a risk-adjustment methodology based
on our solutions. Our diagnosis-based risk-adjustment methods
and predictive modeling tools will support the German healthcare
system in the improvement of quality and efficiency of care.

Quantification
of Loss

P&C
Insurance

We provide data, analytic and networking products for
professionals involved in estimating all phases of building
repair and reconstruction. We provide solutions for every phase
of a buildings life, including:

quantifying the ultimate cost of repair or reconstruction of
damaged or destroyed buildings;



aiding in the settlement of insurance claims; and



tracking the process of repair or reconstruction and
facilitating communication among insurers, adjusters,
contractors and policyholders.

To help our customers estimate replacement costs, we also
provide a solution that assists contractors and insurance
adjusters to estimate repairs using a patented plan-sketching
program. The program allows our customers to sketch floor plans,
roof plans and wall-framing plans and automatically calculates
material and labor quantities for the construction of walls,
floors, footings and roofs.

We also offer our customers access to wholesale and retail price
lists, which include structural repair and restoration pricing
for 466 separate economic areas in North America. We revise this
information monthly and, in the aftermath of a major disaster,
we can update the price lists as often as weekly to reflect
rapid price changes. Our structural repair and cleaning database
contains more than 11,000 unit-cost line items. For each
line item such as smoke cleaning, water extraction and hazardous
cleanup, we provide time and material pricing, including labor,
labor productivity rates (for new construction and restoration),
labor burden and overhead, material costs and equipment costs.
We improve our pricing data by analyzing the actual claims
experience of our customers to verify our estimates. We estimate
that more than 60% of all homeowners claims settled in the
U.S. in 2007 used our solution. Such a large percentage of
the industrys claims leads to accurate pricing information
which we believe is unmatched in the industry.

We also estimate industry-wide insured losses from individual
catastrophic events. We report information on disasters and
determine the extent and type of damage, dates of occurrence,
and geographic areas affected. We define a catastrophe as an
event that causes $25 million or more in direct insured
losses to property and that affects a significant number of
policyholders and insurers. For each catastrophe, our loss
estimate represents anticipated industry-wide insurance payments
for property lines of insurance covering fixed property,
building contents, time-element losses, vehicles and inland
marine (diverse goods and properties). We assign a serial number
that allows our customers to track losses and reserves related
to a single, discrete event.

Under many reinsurance contracts and catastrophe bonds, our
serial number is important for determining which losses will
trigger reinsurance coverage or payment.

Our estimates allow our customers to set loss reserves, deploy
field adjusters and verify internal company estimates. Our
estimates also keep insurers, their customers, regulators, and
other interested parties informed about the total costs of
disasters. We also provide our customers access to daily reports
on severe weather and catastrophes and we maintain a database of
information on catastrophe losses in the United States since
1950.

Healthcare

Bodily injury and workers compensation claims present a
complex array of medical, legal and occupational issues. We
offer a comprehensive claims-management solution that helps our
customers manage bodily injury claims, workers
compensation claims and accident-related comparative-liability
claims. We have a database of our customers claims
histories, including detailed settlements, medical conditions,
provider information and litigation issues, to help them deal
with bodily injury claims. Our system also contains a library of
more than 18,700 medical conditions to help our customers better
understand injuries, treatments, complications and pre-existing
conditions. This allows our customers to identify developing
trends in claims settlements that may lead to changes in
underwriting, legal
and/or
training practices.

Our database also enables our customers to track and direct
their workers compensation cases, including evaluating the
medical and occupational situation of each claimant, maintain
consistency and quality in claims handling and to develop
optimal return-to-work plans. In addition, we have solutions
which assist our customers in better identifying and evaluating
accident-related comparative liability claims. This helps our
customers to manage each claim until settlement.

Our
Customers

Risk
Assessment Customers

The customers in our Risk Assessment segment include the top 100
P&C insurance providers in the United States, including
AIG, Allstate, CNA, Hartford, Liberty Mutual, Nationwide,
Firemans Fund, State Farm, Travelers and Zurich. Our
statistical agent services are used by a substantial majority of
P&C insurance providers in the United States to report to
regulators. Our actuarial services and industry-standard
insurance programs are used by the majority of insurers and
reinsurers in the United States. In addition, certain agencies
of the federal government, including the Federal Emergency
Management Agency, or FEMA, as well as county and state
governmental agencies and organizations, use our solutions to
help satisfy government needs for risk assessment and emergency
response information. In 2008 our largest Risk Assessment
customer accounted for 4.9% of segment revenues, and our top ten
customers accounted for 27.8% of segment revenues. Please see
Certain Relationships and Related Transactions 
Customer Relationships for more information on our
relationship with our principal stockholders.

Decision
Analytics Customers

In the Decision Analytics segment, we provide our P&C
insurance solutions to the majority of the P&C insurers in
the United States. Specifically, our claims database serves
thousands of customers, representing more than 92% of the
P&C insurance industry by premium volume, 26 state
workers compensation insurance funds, 583 self-insurers,
459 third-party administrators, several state fraud bureaus, and
many law-enforcement agencies involved in investigation and
prosecution of insurance fraud. In addition, our catastrophe
modeling solutions have been used in approximately 70% of the
dollar value of catastrophe bond securitizations through 2008.
Also, P&C insurance companies using our building and repair
solutions handle over 60% of the property claims in the United
States. We estimate that more than 80% of insurance repair
contractors and service providers in the United States and
Canada with computerized estimating systems use our building and
repair pricing data.

In the U.S. healthcare industry, our customers include
numerous Blue Cross and Blue Shield plans, Kaiser Permanente and
Munich Reinsurance. In 2008, our largest customer in the
Decision Analytics segment

accounted for 3.8% of segment revenues and our top ten Decision
Analytics customers accounted for 20.5% of segment revenues.

In the U.S. mortgage industry, we have more than 950
customers, including Wells Fargo, Citigroup and Bank of America.
We provide our solutions to 14 of the top 20 mortgage lenders
and four of the top six mortgage insurers, United Guaranty,
RMIC, PMI and Genworth. We have been providing services to
mortgage insurers for over 20 years.

Our
Competitors

We believe no single competitor currently offers the same scope
of services and market coverage we provide. The breadth of
markets we serve exposes us to a broad range of competitors.

Risk
Assessment Competitors

Our Risk Assessment segment operates primarily in the
U.S. P&C insurance industry, where we enjoy a leading
market presence. We have a number of competitors in specific
lines or services.

We encounter competition from a number of sources, including
insurers who develop internal technology and actuarial methods
for proprietary insurance programs. Competitors also include
other statistical agents including the National Independent
Statistical Service, the Independent Statistical Service, and
other advisory organizations providing underwriting rules,
prospective loss costs and coverage language, such as the
American Association of Insurance Services and Mutual Services
Organization.

Competitors for our property-specific rating and underwriting
information are primarily limited to a number of regional
providers of commercial property inspections and surveys,
including Overland Solutions, Inc. and Regional Reporting, Inc.
We also compete with a variety of organizations that offer
consulting services, primarily specialty technology and
consulting firms. In addition, a customer may use its own
internal resources rather than engage an outside firm for these
services. Our competitors also include information technology
product and services vendors including CDS, Inc., management and
strategy consulting firms including Deloitte, and smaller
specialized information technology firms and analytical services
firms including Pinnacle Consulting and EMB.

Decision
Analytics Competitors

In the P&C insurance claims market and catastrophe modeling
market, certain products are offered by a number of companies,
including, ChoicePoint (loss histories and motor vehicle records
for personal lines underwriting), Explore Information Services
(personal automobile underwriting) and Risk Management Solutions
(catastrophe modeling). We believe that our P&C insurance
industry expertise, combined with our ability to offer multiple
applications, services and integrated solutions to individual
customers, enhances our competitiveness against these
competitors with more limited offerings. In the healthcare
market, certain products are offered by a number of companies,
including Computer Sciences Corporation (evaluation of bodily
injury and workers compensation claims), Fair Isaac
Corporation (workers compensation and healthcare claims
cost containment) and Ingenix, McKesson and Medstat (healthcare
predictive modeling and business intelligence). Competitive
factors include application features and functions, ease of
delivery and integration, ability of the provider to maintain,
enhance and support the applications or services and price. In
the mortgage analytics solutions market, our competitors include
First American CoreLogic and DataVerify Corporation (mortgage
lending fraud identification) and ComplianceEase and Mavent
(mortgage regulatory compliance). We believe that none of our
competitors in the mortgage analytics market offers the same
expertise in fraud detection analytics or forensic audit
capabilities.

Development
of New Solutions

We take a market-focused team approach to developing our
solutions. Our operating units are responsible for developing,
reviewing and enhancing our various products and services. Our
data management and production team designs and manages our
processes and systems for market data procurement, proprietary

data production and quality control. Our Enterprise Data
Management, or EDM, team supports our efforts to create new
information and products from available data and explores new
methods of collecting data. EDM is focused on understanding and
documenting
business-unit
and corporate data assets and data issues; sharing and combining
data assets across the enterprise; creating an enterprise data
strategy; facilitating research and product development; and
promoting cross-enterprise communication.

Our software development team builds the technology used in many
of our solutions. As part of our product-development process, we
continually solicit feedback from our customers on the value of
our products and services and the markets needs. We have
established an extensive system of customer advisory panels,
which meet regularly throughout the year to help us respond
effectively to the needs of our markets. In addition, we use
frequent sales calls, executive visits, user group meetings, and
other industry forums to gather information to match the needs
of the market with our product development efforts. We also use
a variety of market research techniques to enhance our
understanding of our clients and the markets in which they
operate.

We are currently funding 43 solutions development initiatives
for new and enhanced offerings, including:



LOCATION Analyst, a new portfolio-assessment system that uses
proprietary insurance industry data, visual maps and
sophisticated reporting to help insurers make better risk
management decisions;



360Value, an innovative web-based system for estimating
replacement values of residential, commercial and agricultural
properties; and



Predictive models to help insurers classify, segment and price
risks for a variety of lines of insurance.

We also add to our offerings through an active acquisition
program. Since 2004, we have acquired 15 businesses, which have
allowed us to enter new markets, offer new products and enhance
the value of existing products with additional proprietary
sources of data.

When we find it advantageous, we augment our proprietary data
sources and systems by forming alliances with other leading
information providers and technology companies and integrating
their product offerings into our offerings. This approach gives
our customers the opportunity to obtain the information they
need from a single source and more easily integrate the
information into their workflows.

Sales,
Marketing and Customer Support

We sell our products and services primarily through direct
interaction with our clients. We employ a three-tier sales
structure that includes salespeople, product specialists and
sales support. As of June 30, 2009, we had a sales force of
156 people. Within the company, several areas have sales
teams that specialize in specific products and services. These
specialized sales teams sell specific, highly technical product
sets to targeted markets.

To provide account management to our largest customers, we
segment the insurance market into two groups. National Accounts
constitutes our 20 largest customers and Strategic Accounts
includes all other insurance companies. Each market segment has
its own sales team. Salespeople are responsible for our overall
relationship with P&C insurance companies.

Salespeople participate in both customer-service and sales
activities. They provide direct support, interacting frequently
with assigned customers to assure a positive experience using
our services. Salespeople also seek out new sales opportunities
and provide support to the rest of the sales team. We believe
our salespeoples product knowledge and local presence
differentiates us from our competition. Product specialists have
product expertise and work with salespeople on specific
opportunities for their assigned products. Both salespeople and
product specialists have responsibility for identifying new
sales opportunities. A team approach and a common customer
relationship management system allow for effective coordination
between the two groups.

The data we use to perform our analytics and power our solutions
are sourced through six different kinds of data arrangements.
First, we gather data from our customers within agreements that
also permit our customers to use the solutions created upon
their data. These agreements remain in effect unless the data
contributor chooses to opt out and represent our primary method
of data gathering. It is very rare that contributors elect not
to continue providing us data. Second, we have agreements with
data contributors in which we specify the particular uses of
their data and provide to the data contributors their required
levels of privacy, protection of data and where necessary
de-identification of data. These agreements represent no cost to
us and generally feature a specified period of time for the data
contributions and require renewal. Third, we mine
data found inside the transactions supported by our solutions;
as an example, we utilize the claims settlement data generated
inside our repair cost estimating solution to improve the cost
factors used in our models. Again, these arrangements represent
no cost to us and we obtain the consent of our customers to make
use of their data in this way. Fourth, we source data generally
at no cost from public sources including federal, state and
local governments. Fifth, we gather data about the physical
characteristics of commercial properties through the direct
observation of our field staff that also perform property
surveys at the request of, and facilitated by, property
insurers. Lastly, we purchase data from data aggregators under
contracts that reflect prevailing market pricing for the data
elements purchased, including county tax assessor records,
descriptions of hazards such as flood plains and professional
licenses. In all our modes of data collection, we are the owners
of whatever derivative solutions we create using the data.
Because of the efficiency of our data gathering methods and the
lack of any cost associated with a large portion of our data,
our costs to source data were 1.8% and 1.9% of revenues for the
year ended December 31, 2008 and the six months ended
June 30, 2009, respectively.

Information
Technology

Technology

Our information technology systems are fundamental to our
success. They are used for the storage, processing, access and
delivery of the data which forms the foundation of our business
and the development and delivery of our solutions provided to
our clients. Much of the technology we use and provide to our
clients is developed, maintained and supported by approximately
800 employees. We generally own or have secured ongoing
rights to use for the purposes of our business all the
customer-facing applications which are material to our
operations. We support and implement a mix of technologies,
focused on implementing the most efficient technology for any
given business requirement or task.

Customers connect to our systems using a number of different
technologies, including internet, VPN, dedicated network
connections, Frame Relay and Value Added Network services
through vendors such as Advantis and IVANS. We utilize Computer
Associates Unicenter, Hewlett Packard Insight Manager, Compuware
Vantage and other best-of-breed point technologies to
aggressively monitor and automate the management of our
environment and applications as well as event-driven operational
alerts.

Data
Centers

We have two primary data centers in Jersey City, New Jersey and
Orem, Utah. In addition, we have data centers dedicated to
certain business units, including AIR and DxCG in Boston and
AISG Claimsearch in Israel. In addition to these key data
centers, we also have a number of smaller data centers located
in other states.

Disaster
Recovery

We are committed to a framework for business continuity
management and carry out annual reviews of the state of
preparedness of each business unit. All of our critical
databases, systems and contracted client services are also
regularly recovered. We also have documented disaster recovery
plans in place for each of our major data centers and each of
our solutions. Our primary data center recovery site is in New
York State, approximately 50 miles northwest of Jersey
City, New Jersey.

Security

We have adopted a wide range of measures to ensure the security
of our IT infrastructure and data. Security measures generally
cover the following key areas: physical security; logical
security of the perimeter; network security such as firewalls;
logical access to the operating systems; deployment of virus
detection software; and appropriate policies and procedures
relating to removable media such as laptops. All laptops are
encrypted and media leaving our premises that is sent to a
third-party storage facility is also encrypted. This commitment
has led us to achieve certification from CyberTrust (an industry
leader in information security certification) since 2002.

Intellectual
Property

We own a significant number of intellectual property rights,
including copyrights, trademarks, trade secrets and patents.
Specifically, our policy language, insurance manuals, software
and databases are protected by both registered and common law
copyrights, and the licensing of those materials to our
customers for their use represents a large portion of our
revenue. We also own in excess of 200 trademarks in the U.S. and
foreign countries, including the names of our products and
services and our logos and tag lines, many of which are
registered. We believe many of our trademarks, trade names,
service marks and logos to be of material importance to our
business as they assist our customers in identifying our
products and services and the quality that stands behind them.
We consider our intellectual property to be proprietary, and we
rely on a combination of statutory (e.g., copyright, trademark,
trade secret and patent) and contractual safeguards in a
comprehensive intellectual property enforcement program to
protect them wherever they are used.

We also own several software method and processing patents and
have several pending patent applications in the U.S. that
complement our products. The patents and patent applications
include claims which pertain to technology, including a patent
for our Claims Outcome Advisor software, our ISO-ITS rating and
policy administration software and for our Xactware Sketch
product. We believe the protection of our proprietary technology
is important to our success and we will continue to seek to
protect those intellectual property assets for which we have
expended substantial research and development capital and which
are material to our business.

In order to maintain control of our intellectual property, we
enter into license agreements with our customers, granting each
customer a license to use our products and services, including
our software and databases. This helps to maintain the integrity
of our proprietary intellectual property and to protect the
embedded information and technology contained in our solutions.
As a general practice, employees,

contractors and other parties with access to our proprietary
information sign agreements that prohibit the unauthorized use
or disclosure of our proprietary rights, information and
technology.

Employees

As of June 30, 2009, we employed 3,572 full-time and
159 part-time employees. None of our employees are
represented by unions. We consider our relationship with our
employees to be good and have not experienced interruptions of
operations due to labor disagreements.

Properties

Our headquarters are in Jersey City, New Jersey. As of
June 30, 2009, our principal offices consisted of the
following properties:

Location

Square Feet

Lease Expiration Date

Jersey City, New Jersey

390,991

May 21, 2021

Orem, Utah

68,343

January 1, 2017

Boston, Massachusetts

47,000

March 31, 2015

Agoura Hills, California

28,666

October 30, 2011

South Jordan, Utah

23,505

May 31, 2014

We also lease offices in 15 states in the United States and
the District of Columbia and Puerto Rico and offices outside the
United States to support our international operations in China,
England, Israel, India, Japan, Germany and Nepal.

We believe that our properties are in good operating condition
and adequately serve our current business operations. We also
anticipate that suitable additional or alternative space,
including those under lease options, will be available at
commercially reasonable terms for future expansion.

Regulation

Because our business involves the distribution of certain
personal, public and non-public data to businesses and
governmental entities that make eligibility, service and
marketing decisions based on such data, certain of our solutions
and services are subject to regulation under federal, state and
local laws in the United States and, to a lesser extent, foreign
countries. Examples of such regulation include the Fair Credit
Reporting Act, which regulates the use of consumer credit report
information; the Gramm-Leach-Bliley Act, which regulates the use
of non-public personal financial information held by financial
institutions and applies indirectly to companies that provide
services to financial institutions; the Health Insurance
Portability and Accountability Act, which restricts the public
disclosure of patient information and applies indirectly to
companies that provide services to healthcare businesses; the
Drivers Privacy Protection Act, which prohibits the public
disclosure, use or resale by any states department of
motor vehicles of personal information about an individual that
was obtained by the department in connection with a motor
vehicle record, except for a permissible purpose and
various other federal, state and local laws and regulations.

These laws generally restrict the use and disclosure of personal
information and provide consumers certain rights to know the
manner in which their personal information is being used, to
challenge the accuracy of such information
and/or to
prevent the use and disclosure of such information. In certain
instances, these laws also impose requirements for safeguarding
personal information through the issuance of data security
standards or guidelines. Certain state laws impose similar
privacy obligations, as well as obligations to provide
notification of security breaches in certain circumstances.

We are also licensed as a rating, rate service, advisory or
statistical organization under state insurance codes in all
fifty states, Puerto Rico, Guam, the Virgin Islands and the
District of Columbia. As such an advisory organization, we
provide statistical, actuarial, policy language development and
related products and services to property/casualty insurers,
including advisory prospective loss costs, other prospective
cost information, manual rules and policy language. We also
serve as an officially designated statistical agent of

state insurance regulators to collect policy-writing and loss
statistics of individual insurers and compile that information
into reports used by the regulators.

Many of our products, services and operations as well as insurer
use of our services are subject to state rather than federal
regulation by virtue of the McCarran-Ferguson Act. As a result,
many of our operations and products are subject to review
and/or
approval by state regulators. Furthermore, our operations
involving licensed advisory organization activities are subject
to periodic examinations conducted by state regulators and our
operations and products are subject to state antitrust and trade
practice statutes within or outside state insurance codes, which
are typically enforced by state attorneys general
and/or
insurance regulators.

Legal
Proceedings

We are a party to legal proceedings with respect to a variety of
matters in the ordinary course of business, including those
matters described below. We are unable, at the present time, to
determine the ultimate resolution of or provide a reasonable
estimate of the range of possible loss attributable to these
matters or the impact they may have on our results of
operations, financial position, or cash flows. This is primarily
because many of these cases remain in their early stages and
only limited discovery has taken place. Although we believe we
have strong defenses for the litigations proceedings described
below, we could in the future incur judgments or enter into
settlements of claims that could have a material adverse effect
on its results of operations, financial position or cash flows.

Claims
Outcome Advisor Litigation

Hensley, et al. v. Computer Sciences Corporation et al.
is a putative nationwide class action complaint, filed in
February 2005, in Miller County, Arkansas state court.
Defendants include numerous insurance companies and providers of
software products used by insurers in paying claims. We are
among the named defendants. Plaintiffs allege that certain
software products, including our Claims Outcome Advisor product
and a competing software product sold by Computer Sciences
Corporation, improperly estimated the amount to be paid by
insurers to their policyholders in connection with claims for
bodily injuries.

We entered into settlement agreements with plaintiffs asserting
claims relating to the use of Claims Outcome Advisor by
defendants Hanover Insurance Group, Progressive Car Insurance,
and Liberty Mutual Insurance Group. Each of these settlements
was granted final approval by the court and together the
settlements resolve the claims asserted in this case against us
with respect to the above insurance companies, who settled the
claims against them as well. A provision was made in 2006 for
this proceeding and the total amount the Company paid in 2008
with respect to these settlements was less than
$2.0 million. A fourth defendant, The Automobile Club of
California, which is alleged to have used Claims Outcome Advisor
was dismissed from the action. On August 18, 2008, pursuant
to the agreement of the parties the Court ordered that the
claims against us be dismissed with prejudice.

Hanover Insurance Group has made a demand for reimbursement,
pursuant to an indemnification provision contained in a
December 30, 2004 License Agreement between Hanover and the
Company, of its settlement and defense costs in the Hensley
class action. Specifically, Hanover has demanded
$2.5 million including $0.6 million in attorneys
fees and expenses. We dispute that Hanover is entitled to any
reimbursement pursuant to the License Agreement. We have entered
into a tolling agreement with Hanover in order to allow the
parties time to resolve the dispute without litigation.

Xactware
Litigation

The following two lawsuits have been filed by or on behalf of
groups of Louisiana insurance policyholders who claim, among
other things, that certain insurers who used products and price
information supplied by our subsidiary, Xactware (and those of
another provider) did not fully compensate policyholders for
property damage covered under their insurance policies. The
plaintiffs seek to recover compensation for their damages in an
amount equal to the difference between the amount paid by the
defendants and the fair market repair/restoration costs of their
damaged property.

Schafer v. State Farm Fire & Cas. Co., et
al. is a putative class action pending against us and State Farm
Fire & Casualty Company filed in March 2007 in
the Eastern District of Louisiana. The complaint alleged
antitrust violations, breach of contract, negligence, bad faith,
and fraud. The court dismissed the antitrust claim as to both
defendants and dismissed all claims against us other than fraud,
which will proceed to the discovery phase along with the
remaining claims against State Farm. The plaintiffs motion
to certify a class with respect to the fraud and breach of
contract claims was denied on August 3, 2009.

Mornay v. Travelers Ins. Co., et al. is a putative
class action pending against us and Travelers Insurance Company
filed in November 2007 in the Eastern District of Louisiana. The
complaint alleged antitrust violations, breach of contract,
negligence, bad faith, and fraud. As in Schafer, the court
dismissed the antitrust claim as to both defendants and
dismissed all claims against us other than fraud. The court has
stayed all proceedings in the case pending an appraisal of the
lead plaintiffs insurance claims.

At this time it is not possible to determine the ultimate
resolution of, or estimate the liability related to, these
matters. No provision for losses has been provided in connection
with the Xactware litigation.

iiX
Litigation

In March 2007, our subsidiary, Insurance Information Exchange,
or iiX, as well as other information providers and insurers in
the State of Texas, were served with a summons and class action
complaint filed in the United States District Court for the
Eastern District of Texas alleging violations of the Driver
Privacy Protection Act, or the DPPA. Plaintiffs brought the
action on their own behalf and on behalf of all similarly
situated individuals whose personal information is contained in
any motor vehicle record maintained by the State of Texas and
who have not provided express consent to the State of Texas for
the distribution of their personal information for purposes not
enumerated by the DPPA and whose personal information has been
knowingly obtained and used by the defendants. The complaint
alleges that the defendants knowingly obtained personal
information and that the obtaining and use of this personal
information was not for a purpose authorized by the DPPA. The
complaint seeks liquidated damages in the amount of $2,500 for
each instance of a violation of the DPPA, punitive damages and
the destruction of any illegally obtained personal information.
The Court granted iiXs motion to dismiss the complaint
based on failure to state a claim and lack of standing, and the
plaintiffs are appealing the dismissal.

The following table sets forth information regarding the
executive officers and directors of the Company, as of
June 30, 2009:

Name

Age

Position

Frank J. Coyne

60

Chairman of the Board of Directors, President and Chief
Executive Officer

Scott G. Stephenson

52

Executive Vice President and Chief Operating Officer

Mark V. Anquillare

43

Senior Vice President and Chief Financial Officer

Kenneth E. Thompson

49

Senior Vice President, General Counsel and Corporate Secretary

Carole J. Banfield

69

Executive Vice President  Information Services and
Government Relations

Vincent Cialdella

58

Senior Vice President  AISG

Kevin B. Thompson

56

Senior Vice President  Insurance Services

J. Hyatt Brown

71

Director

Glen A. Dell

73

Director

Christopher M. Foskett

51

Director

Constantine P. Iordanou

59

Director

John F. Lehman, Jr.

66

Director

Thomas F. Motamed

60

Director

Samuel G. Liss

52

Director

Andrew G. Mills

57

Director

Arthur J. Rothkopf

74

Director

David B. Wright

60

Director

A brief biography of each executive officer and director follows.

Executive
Officers

Frank J. Coyne has been our Chairman, President
and Chief Executive Officer since 2002. From 2000 to 2002,
Mr. Coyne served as our President and Chief Executive
Officer and he served as our President and Chief Operating
Officer from 1999 to 2000. Mr. Coyne joined the Company
from Kemper Insurance Cos. where he was Executive Vice President
Specialty and Risk Management Groups. Previously, he served in a
variety of positions with General Accident Insurance, and was
elected its President and Chief Operating Officer in 1991. He
has also held executive positions with Lynn Insurance Group,
Reliance Insurance Co. and PMA Insurance Co.

Scott G. Stephenson has been our Chief Operating
Officer since June 2008 and leader of our Decision Analytics
segment. From 2002 to 2008, Mr. Stephenson served as our
Executive Vice President and he served as President of our
Intego Solutions business from 2001 to 2002. Mr. Stephenson
joined the Company from Silver Lake Partners, a
technology-oriented private equity firm, where he was an
executive-in-residence
from 1999 to 2001. From 1989 to 1999 Mr. Stephenson was a
partner with The Boston Consulting Group, eventually rising to
senior partner and member of the firms North American
operating committee.

Mark V. Anquillare has been our Senior Vice
President and Chief Financial Officer since 2007.
Mr. Anquillare joined the Company as Director of Financial
Systems in 1992 and since joining the Company,
Mr. Anquillare has held various management positions,
including Assistant Vice President, Vice President and

Controller and Senior Vice President and Controller. Prior to
1992, Mr. Anquillare was employed by the Prudential
Insurance Company of America. Mr. Anquillare is a Fellow of
the Life Management Institute.

Kenneth E. Thompson has been our Senior Vice
President, General Counsel and Corporate Secretary since 2006.
Prior to joining the Company in 2006, Mr. Thompson was a
partner of McCarter & English, LLP from 1997 to 2006.
Mr. Thompson also serves on the board of directors of
Measurement Specialties, Inc.

Carole J. Banfield has been our Executive Vice
President Information Services and Government Relations
Department focused on our Risk Assessment segment since 1996.
Ms. Banfield joined the Company in 1970 as an assistant
actuary in the Homeowners Actuarial Division and since 1977 has
held various management positions, including Vice President
Government and Industry Relations. Ms. Banfield began her
career with the National Bureau of Casualty Underwriters in
1962. Ms. Banfield is a member of the American Academy of
Actuaries and an Associate of the Casualty Actuarial Society.
She currently serves on the board of directors of the American
Society of Workers Compensation Professionals, the
Insurance Data Management Association and on the Industry
Advisory Group of ACORD.

Vincent Cialdella has been our Senior Vice
President, AISG since April 2008 in our Decision Analytics
segment. Prior to April 2008, Mr. Cialdella served as Vice
President of ISO Claims Solutions, a division of AISG, since
2000. Mr. Cialdellas career at the Company spans
approximately thirty years, during which he has served as
Assistant Vice President of Software Products, Corporate Systems
and Application Development Support Center.

Kevin B. Thompson has been our Senior Vice
President, Insurance Services since 2003 focused on our Risk
Assessment segment. Mr. Thompson joined the Company in 1974
and has held various management positions, including Vice
President, Insurance Services, Vice President, Personal and
Standard Commercial Lines, Vice President, Standard Commercial
Lines, Assistant Vice President, Commercial Casualty Actuarial.
Mr. Thompson is also a Member of the American Academy of
Actuaries and Fellow of the Casualty Actuarial Society. From
1996 to 1999 he served as Vice President - Admissions of
the Casualty Actuarial Society and as a Member of the Board of
Directors from 1994 to 1996.

Class A
Directors

Christopher M. Foskett has served as one of our
directors since 1999. Mr. Foskett was a Managing Director
and Global Head of the Financial Institutions Group in
Citigroups Corporate Bank from 2007 to 2008. From 2003 to
2007, Mr. Foskett was Head of Sales and Relationship
Management for Citigroup Global Transaction Services. He also
served as Global Industry Head for the Insurance and Investment
Industries in Citigroups Global Corporate Bank from 1999
to 2003. Previously, he held various roles in Citigroups
mergers and acquisitions group.

David B. Wright has served as one of our directors
since 1999. Mr. Wright has been Chairman and Chief
Executive Officer of Verari Systems since 2006. Before joining
Verari Systems, he was Executive Vice President, Office of the
CEO, Strategic Alliances and Global Accounts of EMC Corporation
from 2004 to 2006. Between 2001 and 2004 he was Chairman and
Chief Executive Officer of Legato Systems and from 1997 to 2000
Mr. Wright was the President and Chief Executive Officer of
Amdahl Corporation. Mr. Wright is also a director on the
board of VA Software and ActiveIdentity.

John F. Lehman, Jr. has served as one of our
directors since 1995. Mr. Lehman is Chairman of
J. F. Lehman & Co., an investment firm that
he founded in 1991. Prior to founding J. F. Lehman &
Co., he was Managing Director of Paine Webber, Inc. from 1988 to
1991. In 1981, Mr. Lehman was appointed Secretary of the
Navy by President Reagan and served in that capacity until 1987.
Mr. Lehman was a member of the bipartisan September 11
Commission and serves on the board of directors of Ball Corp.,
EnerSys, Inc., Hawaii Superferry Inc., Atlantic Marine, Oao
Technology Solutions Inc. and Special Devices, Incorporated.

Andrew G. Mills has served as one of our directors
since 2002. Mr. Mills has been President of The Kings
College in New York, NY since 2007. He is the former Chairman of
Intego Solutions LLC, which he founded in 2000. Mr. Mills
previously served as Chief Executive Officer of The Thomson
Corporations Financial and Professional Publishing unit
and as a member of Thomsons board of directors. In 1984,
he led

the start-up
operations of Business Research Corporation and was responsible
for overseeing its sale and integration into The Thompson
Corporation. He began his career with Courtaulds Ltd. and joined
The Boston Consulting Group in 1979. Mr. Mills is on the
board of directors of The Kings College, Lexington
Christian Academy, Camp of the Woods and Hope Christian Church,
and is a member of the Massachusetts State Board of the
Salvation Army.

Arthur J. Rothkopf has served as one of our
directors since 1993. Mr. Rothkopf has served as Senior
Vice President and Counselor to the President of the
U.S. Chamber of Commerce since July of 2005. From 1993 to
2005, Mr. Rothkopf was President of Lafayette College in
Easton, Pennsylvania. Prior to serving as President of Lafayette
College, Mr. Rothkopf was General Counsel and Deputy
Secretary of the U.S. Department of Transportation,
appointed by President George H. W. Bush. From 1967 through
1991, he practiced law with the Washington, D.C., firm of
Hogan & Hartson, where he was a senior partner.
Mr. Rothkopf is a trustee of American University in
Washington D.C. and a trustee of the Educational Testing Service
in Princeton, New Jersey.

J. Hyatt Brown has served as one of our
directors since 2003. Mr. Brown has been Chairman of
Brown & Brown, Inc. since 1993 and served as
Brown & Browns Chief Executive Officer from 1993
until July 1, 2009. Mr. Brown is a Trustee of Stetson
University in Florida, a past member of the Florida Board of
Regents and a member of the Florida Council of 100. He was
elected to the Florida House of Representatives in 1972 and was
elected Speaker in 1978. Mr. Brown retired as Speaker in
1980. He also serves on the board of directors of Rock-Tenn
Company, the FPL Group Inc. and the Daytona International
Speedway Corporation.

Glen A. Dell has served as one of our directors
since 1995. Mr. Dell is a retired Partner of MapleWood
Equity Partners LP. Mr. Dell served as a Partner of
MapleWood Equity Partners LP from 1998 to 2007. From 1992 to
1997, Mr. Dell served as President of Investcorp Management
Services Inc., where he was responsible for post-acquisition
management of Investcorps portfolio of companies in North
America. He has also served as a consultant, specializing in
interim management services, and held executive positions with
General Electric Co., International Paper Co., and JWT Group,
Inc. Mr. Dell was a member of the board of directors of
Parts Depot, Inc. until February 28, 2008.

Class B
Directors

Constantine P. Iordanou has served as one of our
directors since 2001. Mr. Iordanou has served as President
and Chief Executive Officer of Arch Capital Group Limited, or
ACGL, since August 2003 and as director of ACGL since January
2002. From January 2002 through July 2003, he was Chief
Executive Officer of Arch Capital (U.S.) Inc., a wholly owned
subsidiary of ACGL. Prior to joining ACGL in 2002,
Mr. Iordanou served in various capacities for Zurich
Financial Services and its affiliates, including as Senior
Executive Vice President of Group Operations and Business
Development of Zurich Financial Services, President of
Zurich-American
Specialties Division, Chief Operating Officer and Chief
Executive Officer of Zurich American and Chief Executive Officer
of Zurich North America. Prior to joining Zurich in March of
1992, he served as President of the Commercial Casualty division
of the Berkshire Hathaway Group and served as Senior Vice
President with the American Home Insurance Company, a member of
the American International Group.

Samuel G. Liss has served as one of our directors
since 2005. Mr. Liss has been Executive Vice President at
The Travelers Companies since 2004. Before the merger of The St.
Paul and Travelers Companies, Mr. Liss served as Executive
Vice President at The St. Paul from February 2003 to April 2004.
From 1994 to 2001, Mr. Liss was a Managing Director at
Credit Suisse First Boston, or CSFB, initially focused on equity
research across a range of financial institution sectors and
subsequently serving in a Senior Investment Banking
relationship, advisory and execution role in CSFBs
Financial Institutions Group, including leadership of its asset
management industry practice. Mr. Liss was a senior equity
analyst at Salomon Brothers from 1980 to 1994.

Thomas F. Motamed has served as one of our
directors since 2009. Mr. Motamed is the Chairman of the Board
and Chief Executive Officer of CNA Financial Corporation since
January 1, 2009. From December

2002 to June 2008, he served as Vice Chairman and Chief
Operating Officer of The Chubb Corporation and President and
Chief Operating Officer of Chubb & Son.

Board
Composition

The number of directors will be fixed by our board of directors,
subject to the terms of our amended and restated certificate of
incorporation. From the date of this prospectus until the
earlier of (a) the
24-month
anniversary of the date of this prospectus or (b) the date
on which there are no shares of Class B common stock issued
and outstanding, our board of directors will consist of between
11 and 13 directors, and will be comprised as follows:

Our by-laws provide that the board of directors may designate
one or more committees. We currently have the following
committees: Executive Committee, Audit Committee, Compensation
Committee, Finance and Investment Committee, and Nominating and
Corporate Governance Committee.

The Executive Committee currently consists of Frank J. Coyne
(Chair), Glen A. Dell, Constantine P. Iordanou, John F.
Lehman, Jr. and Arthur J. Rothkopf. The Executive Committee
exercises all the power and authority of the board of directors
(except those powers and authorities that are reserved to the
full board of directors under Delaware law) between regularly
scheduled board of directors meetings. The Executive Committee
also makes recommendations to the full board of directors on
various matters. The Executive Committee meets as necessary upon
the call of the chairman of the board of directors.

The Audit Committee currently consists of Glen A. Dell (Chair),
Christopher M. Foskett, Samuel G. Liss, Andrew G. Mills, Thomas
F. Motamed and David B. Wright, all of whom are
independent as defined under applicable listing
rules. Each member of our Audit Committee is financially
literate, as such term is interpreted by our board of directors.
In addition, Glen A. Dell meets the qualifications of an
audit committee financial expert in accordance with
SEC rules, as determined by our board of directors. The Audit
Committee reviews and, as it deems appropriate, recommends to
the board of directors the internal accounting and financial
controls for the Company and the accounting principles and
auditing practices and procedures to be employed in preparation
and review of the financial statements of the Company. The Audit
Committee also provides assistance to our board of directors in
fulfilling its responsibilities with respect to our compliance
with legal and regulatory requirements. In addition, the Audit
Committee also makes recommendations to the board of directors
concerning the engagement of the independent accounting firm and
the scope of the audit to be undertaken by such auditors.

The Compensation Committee currently consists of John F.
Lehman, Jr. (Chair), Glen A. Dell, Constantine P. Iordanou
and David B. Wright, all of whom are independent as
defined under applicable listing rules. The Compensation
Committee reviews and, as it deems appropriate, recommends to
the board of directors policies, practices and procedures
relating to the compensation of the officers and other
managerial employees and the establishment and administration of
employee benefit plans. The Compensation Committee also
exercises all authority under the Companys employee equity
incentive plans and advises and consults with the officers of
the Company as may be requested regarding managerial personnel
policies.

The Finance and Investment Committee currently consists of
Samuel G. Liss (Chair), J. Hyatt Brown, Christopher M.
Foskett, Andrew G. Mills, and Thomas F. Motamed. The Finance and
Investment Committee meets annually and at such other times as
necessary to establish, monitor and evaluate the Companys
investment policies, practices and advisors, and to advise
management and the board of directors on the financial aspects
of strategic and operational directions, including financial
plans, capital planning, financing alternatives, and acquisition
opportunities.

The Nominating and Corporate Governance Committee currently
consists of Constantine P. Iordanou (Chair), J. Hyatt Brown,
John F. Lehman, Jr., and Arthur J. Rothkopf. Constantine P.
Iordanou, J. Hyatt Brown, John F. Lehman, Jr., and
Arthur J. Rothkopf are independent as defined under
applicable listing rules. Following this offering, we expect
that the Nominating and Corporate Governance Committee will be
comprised of independent directors in accordance with applicable
requirements. The Nominating and Corporate Governance Committee
reviews and, as it deems appropriate, recommends to the board of
directors policies and procedures relating to director and board
of directors committee nominations and corporate governance
policies.

Code of
Business Conduct and Ethics

Our board of directors has established a code of business
conduct and ethics that applies to our employees, agents,
independent contractors, consultants, officers and directors.
Any waiver of the code of business conduct and ethics may be
made only by our board of directors and will be promptly
disclosed as required by law or stock exchange regulations. The
board of directors has not granted any waivers to the code of
business conduct and ethics.

Corporate
Governance Guidelines

Our board of directors has adopted corporate governance
guidelines that comply with the applicable listing requirements
and the regulations of the Securities and Exchange Commission.

Compensation
Committee Interlocks and Insider Participation

No member of the Compensation Committee is a current or former
officer of the Company or any of our subsidiaries. In addition,
there are no compensation committee interlocks with the board of
directors or compensation committee of any other company.

Directors
Compensation and Benefits

Annual Retainer. Effective June 1, 2007,
each non-employee director receives a retainer fee of $50,000
per year for membership on the board of directors. Each
non-employee director who chairs a committee receives an
additional $5,000 retainer fee, with the exception of the
chairpersons of the Audit Committee and Compensation Committee,
each of whom receives an additional $12,500 annual retainer fee.

Each non-employee director may elect to receive his or her
annual retainer in the form of (i) cash, (ii) deferred
cash, (iii) shares of Class A common stock,
(iv) deferred shares of Class A common stock,
(v) options to purchase Class A common stock or
(vi) a combination of (i), (ii), (iii), (iv) and (v),
except that not more than 50% of the Annual Retainer may be paid
in cash. Any portion of the annual retainer taken in options are
exercisable for a period of ten years from the date of grant
(subject to earlier termination if the individual ceases to be a
director of the Company), vest immediately, and have an exercise
price equal to the fair market value of the Class A common
stock on the date of grant.

Meeting Attendance Fees. Each non-employee
director receives a $1,500 fee for each board of directors or
Committee meeting attended in person. Meeting attendance fees
are payable only in cash or deferred cash.

Stock Option Grants. Effective as of the 2007
Annual Meeting of Stockholders, each non-employee director
receives an annual option grant having a Black-Scholes value of
$125,000. The initial awarding of such options is being phased
in over a period of three years, so that, from 2007 through
2009, each non-

employee director receives (or received) the initial grant in
the year he or she is (or was) re-elected. Such options are
exercisable for a period of ten years from the date of
grant (subject to earlier termination if the individual ceases
to be a director of the Company), vest on the first anniversary
of the date of grant, and have an exercise price equal to the
fair market value of the Class A common stock on the date
of grant. Prior to the 2007 Annual Meeting of Stockholders, each
non-employee director was granted an option to purchase
1,500 shares of Class A common stock every three years
upon his or her re-election to the Board.

Employee-directors
receive no additional compensation for service on the board of
directors. Mr. Frank J. Coyne is the only
employee-director.

The table below shows compensation paid to or earned by the
directors during 2008. As noted above, directors may elect to
receive compensation in various forms other than cash. Also,
prior to 2007, directors received stock option grants every
three years upon their re-election to the board. We are required
to report equity awards based on accounting expense. The amounts
shown for each director are not uniform because accounting
expense will differ in part depending on how each director
elected to receive his or her compensation and the years in
which they were re-elected to the board. The numbers shown in
the following table do not take into account the approximately
fifty-for-one
split that will occur prior to the consummation of this offering.